The High Court of Singapore granted the crypto-lending platform Vauld a moratorium on proceedings until 7 November 2022, instead of the six months requested. Bloomberg reports.
Under the ruling, 147,000 creditors will be unable to file suits against the company. The court did not preclude extending the period depending on Vauld’s progress in addressing the problems.
The platform must provide creditors within two weeks with cash-flow data and asset valuations. Within eight weeks, information on account management.
On 4 July, the crypto-lending platform announced a suspension of operations and potential restructuring due to financial difficulties. The next day it emerged that rival Nexo signed a preliminary agreement to acquire Vauld.
Subsequently, media citing court documents found that Vauld’s outstanding debt after these events stood at $402 million. Of these, $363 million went to retail investors. The firm did not repay $34 million to one of them, and more than $10 million to three others.
The platform’s problems began with the collapse of Terra — the equivalent of $28 million it held in staking UST. The next blow came from the overall crypto market downturn — Vauld held positions in Bitcoin, Ethereum, MATIC and XRP.
The third factor in the loss of financial stability were defaults by some counterparties, which led to unrecoverable losses of about $1.7 million. The fourth reason for insolvency were expenditures on sponsorship agreements.
Galaxy Digital chief Mike Novogratz said that the Terra ecosystem collapse, along with problems at Celsius Network, Voyager Digital and Three Arrows Capital, had made the entire industry look like a ‘bunch of idiots’.
Read ForkLog’s bitcoin news in our Telegram — cryptocurrency news, prices and analysis.