Vauld, a Singapore-based crypto exchange and lending startup, has suspended withdrawals, trading and deposits on its eponymous platform with immediate effect as it navigates. “financial challenges,” it said Monday.
The three-year-old startup — which includes Peter Thiel-backed Valar Ventures, Coinbase Ventures and Pantera Capital among backers and has raised about $27 million — says it is facing challenges financials amid a market downturn, which it said has spurred customers to withdraw about $198 million since June 12.
Vauld founder and CEO Darshan Bathija says the startup is exploring restructuring options and joined Kroll for financial advice and Cyril Amarchand Mangaldas and Rajah & Tann for legal advice in India and Singapore.
The startup intends to apply to the Singapore courts for a moratorium. “We are confident that, with the advice of our financial and legal advisors, we will be able to arrive at a solution that best protects the interests of Vauld’s customers and stakeholders,” he wrote. in a blog post, adding that the startup will make “Specific Agreements” for certain clients that need to satisfy their margin calls.
It’s unclear how many users Vauld serves.
Vauld allows customers to earn what it claims is “the highest interest rates in the industry on major cryptocurrencies.” On its website, it says it offers 12.68% annualized yield on staking several so-called stablecoins including USDC and BUSD and 6.7% on Bitcoin and Ethereum tokens. The platform allows customers to borrow with their tokens and also facilitates a number of other trading services.
On its website, Vauld says it offers users the ability to borrow an LTV (loan to value) of 66.67% of their token and “instantly” approve its loans. surname. Like some tech stocks, many crypto tokens have lost more than 70% of their value in the past six months.
“We seek the understanding of customers using the Vauld platform that we will not be in a position to process any new or additional requests or instructions in this regard. Specific arrangements will be made on customer deposits if it may be necessary for some customers to satisfy margin calls related to mortgage loans,” Bathija wrote today. now.
The announcement follows Vauld cutting its workforce by 30% two weeks ago.
This move came as a surprise. On June 16, Bathija assured Vauld customers that the platform is not exposed to degrees Celsius, another lending startup face growing financial challengesand Three Arrows Capital, one of the famous crypto hedge funds filed for Chapter 15 bankruptcy over the weekend.
“We remain liquid despite market conditions. Over the past few days, all withdrawals have been processed as normal and this will continue to happen in the future,” said Bathija wrote earlier.
Several crypto veterans including Binance founder and CEO Changpeng Zhao have warned in recent weeks that many other DeFi platforms are on the brink of collapse. In a recent podcastZhao said that Binance has partnered with more than 50 companies in recent weeks to evaluate funding/donation opportunities in a number of businesses.
On Friday, the US branch of FTX signed an agreement with troubled crypto lender BlockFi that gives the crypto exchange the option to buy the startup for up to $240 million based on the startup’s performance. BlockFi, among companies that have liquidated at least some of the positions held by Three Arrows Capital, has worth 3 billion dollars in a funding round it revealed in March 2021.