The crypto-lending platform Vauld has once again secured an extension of the moratorium on proceedings. Singapore’s High Court has set a new deadline — 24 March, The Block reports.
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Initially, the company sought temporary protection until 28 April. According to the report, Vauld also announced that it had terminated negotiations for a possible takeover with competitor Nexo.
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\”Nexo was not able to provide sufficient information to substantiate its solvency claim (it declined to undergo a comprehensive financial audit),\” the statement said.
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An alternative restructuring plan includes two options: the company’s assets are placed under management or distributed among creditors through a managed liquidation.
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On 4 July 2022, the crypto-lending platform announced a suspension of operations and a possible restructuring due to financial difficulties. The next day it emerged that competitor Nexo подписал с Vauld preliminary agreement to acquire Vauld.
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Subsequently, media citing court documents found that Vauld’s outstanding debt after these events amounted to $402 million. Of this, $363 million was owed to retail investors, one of whom the firm did not return $34 million, and more than $10 million to three others.
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The platform’s problems began with the коллапса Terra — the equivalent of $28 million it held in UST staking. The next blow was the overall 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 deals.
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In December, Vauld CEO Darshan Bathija said that talks with Nexo ‘did not come to fruition‘. The latter denied backing out of the purchase of the competitor and presented an updated takeover offer.
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Earlier in January 2023, Nexo reached a settlement with U.S. regulators over allegations of unregistered securities sales and agreed to pay a $45 million fine.
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From 1 April 2023, the crypto-lending platform will discontinue offering the Earn Interest Product to American investors.