Crypto lending and trading platform Vauld announced on Monday that it will suspend withdrawals, trading and deposits for its customers effective immediately due to “financial challenges.“
The Singapore-registered company is one of the prominent players in the industry, backed by the likes of Coinbase, Valar Ventures, and Pantera Capital.
Darshan Bathija, CEO of Vauld, said that volatile market conditions had put the management in a difficult position, having processed withdrawals exceeding $197.7 million since the 12th of June 2022. The company believes TerraLUNA’s collapse, Celsius Network’s financial troubles, and 3AC’s default on loans are the reasons behind the mass withdrawals.
As a result, Vauld was forced to lay off 30% of its employees last month, with the top management taking a 50% pay cut. It has also cut down on marketing expenses and paused vendor engagements.
The company statement read:
“We seek the understanding of customers of the Vauld platform that we will not be in a position to process any 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 collateralised loans.”
As part of the restructuring process, the firm will seek a moratorium before the Singapore courts. It has also hired financial consultancy firm Kroll Pte Limited and legal advisors, including Cyril Amarchand Mangaldas of India and Rajah & Tann Singapore LLP, to explore possible options and ride out the current financial crisis.
Founded in 2018 by Bathija and Sanju Kurian, Vauld raised $27 million last year to ramp up its operations to 1 million users across the US, Singapore, India, and Europe.
However, things didn’t go according to plans, as with many other crypto firms that have recently announced lay-offs and withdrawal freezes due to one of the worst crypto market meltdowns.