- Vauld, a crypto lending and exchange platform, has halted all its operations, including trading, deposits and withdrawals.
- The company has hired advisors to help with the challenges of a potential restructuring.
- Binance's Changpeng Zhao condemns Vauld's actions and tells 6.5 million followers on crypto Twitter to steer clear of platforms that require VC funding.
- Vauld is backed by crypto heavyweights Peter Thiel's Valar Ventures, Coinbase Ventures and Pantera Capital.
Vauld, a crypto lending and exchange platform, suspended its trading, deposits and withdrawals with immediate effect, in a manner reminiscent of Celsius. The Singapore-headquartered crypto platform is navigating "financial challenges" with the support of its investors and advisors.
Also read: Is Celsius Network collapsing like Terra's LUNA?
Vauld withdrawals halted abruptly, ahead of restructuring
Vauld has taken a precautionary measure in the crypto bear market, halting its trading, deposits and withdrawals and inviting advisors to begin restructuring. The Singapore-headquartered crypto lending and exchange startup announced that it is navigating "financial challenges" in the current market downturn after customers pulled out $198 million in the capital since June 12, 2022.
The three-year-old firm is backed by crypto heavyweights Peter Thiel's Valar Ventures, Coinbase Ventures and Pantera Capital, among others. Vauld recently raised $27.5 million in funding and is now exploring restructuring options.
Darshan Bathija, Vauld founder and chief executive, revealed that Vauld had engaged Kroll, an American corporate investigation and risk consulting firm, to navigate the challenges it faces with mounting withdrawals and the crypto bear market. Cyril Amarchand Mangaldas and Rajah & Tann are Vault's legal advisors for India and Singapore.
Bathija wrote in a blog post,
We seek the understanding of customers of the Vauld platform that we will not be in a position to process any new or further requests or instructions in this regard. Specific arrangements will be made for customer deposits as may be necessary for certain customers to meet margin calls in connection with collateralized loans.
The firm has confirmed no investment in Celsius and Three Arrows Capital and affirmed that Vauld remains liquid despite adverse market conditions. Further, Vauld had honored withdrawals before the announcement on July 4, 2022 and assured the community that it would continue to do so going forward.
Vauld is hit by a crisis due to a combination of the volatile crypto market, the financial difficulties of its business partners and rapid withdrawals from customers. The implosion of TerraUSD and the collapse of Celsius and Three Arrow's Capital added to Vauld's woes as it fueled an acceleration in the pace of withdrawals from the exchange and lending platform.
It is currently unclear how many users Vauld serves and what arrangements the firm will make for customers who need to meet their margin calls.
Crypto influencers condemn Vault's strategy
Changpeng Zhao, the CEO of Binance, has voiced his concerns for Vauld users. The Binance CEO warned his 6.5 million followers to be careful when using platforms that require VC funding.
Zhao revealed there are some exceptions to the above rule; however, more often than not, VC-backed firms don't have a real business model yet.
Unpopular opinion: careful when using platforms that require VC funding, they often don't have a real business model yet.
(over generalization, there are exceptions of course)https://t.co/lI1pvdPdKr
— CZ Binance (@cz_binance) July 4, 2022
