Vauld secures extension of temporary protection from creditors

Vauld crypto-lending platform has secured an extension of the moratorium on proceedings until January 20, 2023. The Block reports.

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The High Court of Singapore did not grant the requested extension — until March 7. If Vauld applies again for an extension, a hearing will be held on January 17.

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By November 25, 2022, the platform’s representatives must provide written testimony addressing the issues that have arisen.

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“We aim to ease the difficulties facing our creditors and are working on a restructuring that would serve their interests,” the firm said.

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On July 4, the crypto-lending platform announced a suspension of operations and a possible restructuring due to financial difficulties. The next day it emerged that rival Nexo signed a preliminary agreement to acquire Vauld.

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Subsequently, media citing court documents found that Vauld’s outstanding debt after these events stood at $402 million. Of this, $363 million was owed to retail investors. The firm did not return $34 million to one of them, and more than $10 million to three others.

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The platform’s troubles began with the Terra collapse — the $28 million it held in UST staking. The next blow was the broad crypto market downturn — Vauld held positions in Bitcoin, Ethereum, MATIC and XRP.

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The third factor was defaults by some counterparties, which led to irrecoverable losses of about $1.7 million. The fourth reason for insolvency was spending on sponsorship agreements.

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Earlier, Vauld obtained temporary protection from creditors — the court granted the platform a moratorium until November 7.

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