Vauld, a crypto-lending platform, has again secured an extension of the moratorium on proceedings. Singapore’s High Court set a new deadline — 28 April, The Block reports.
The previous deadline expired on 24 March. The company has managed to push the deadline back for a fifth time.
According to the publication’s sources, Vauld will need to refine its restructuring proposal by 14 April.
The company promised that the plan for an “orderly wind-down” over three years would yield a faster and more efficient return of funds to creditors, and would also provide adequate time for DeFi Payments [the firm’s Singapore subsidiary] to recover illiquid assets.
If the proposed restructuring plan is rejected following the hearings, Vauld will be liquidated. The process could take more than ten years.
The company expects a “restart of the business,” shifting to a revenue-generation model for new clients through DeFi protocols to attract new capital. In this scheme creditors would “retain oversight and control over expenditures through a representative appointed to the board.”
The initiative is expected to be implemented by a “new leadership.” Vauld co-founders Darshan Bathija and Sanju Sonikuri will step down.
On 4 July 2022, the crypto-lending platform announced a halt to operations and possible restructuring amid financial difficulties. The following day, it emerged that rival Nexo signed with Vauld a preliminary agreement to acquire.
Subsequently, media citing court documents found that Vauld’s outstanding debt after these events totalled $402 million. Of that, $363 million went to retail investors, one of whom the firm did not return $34 million, and another three — over $10 million.
The platform’s problems began with the Terra collapse — the equivalent of $28 million it held in UST staking. The next blow was the overall downturn in the crypto market, with Vauld holding positions in Bitcoin, Ethereum, MATIC and XRP.
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.
In December 2022, Bathija said that negotiations with Nexo did not come to fruition.