In a statement, Singapore-based crypto exchange Vauld has made the “difficult decision to suspend all withdrawals, trading and deposits on the Vauld platform with immediate effect.”
In what appears to be a run on the Vauld, the group intends to “apply to the Singapore courts for a moratorium,” as Vauld customers have tried to withdraw an “excess of a $197.7 million since 12 June 2022.”
According to report, Vauld boasted $1 billion assets under management in May this year, while on June 16, a company email stated that business would “continue to operate as usual.” However, just 18 days later, the company turned to exploring “potential restructuring options.”
CEO Darshan Bathija tweeted on June 21 that Vauld had cut its team by 30%, the very first sign that the company was under pressure. Separately, Bathija also stressed that Three Arrows Capital (3AC) who was an early investor in the company, but had exited in late 2021.
The statement from Vauld suggests that the reasons behind their decision to freeze customers’ money were due to “volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate”.
As such, Vauld follows in the footsteps of large CeFi platforms such as Celsius, Voyager and BlockFi. Voyager specifically blamed 3AC for their recent decision to freeze customers’ funds and BlockFi is close to a $240 million deal with FTX following financial difficulties. Furthermore, plans to salvage Celsius from bankruptcy were recently shared by lead investor BnkToTheFuture.
Vauld boasted double-digit interest rates on popular stablecoins such as Tether (USDT) and Dai (DAI), while Bitcoin (BTC) interest could reach 7.23% as Cointelegraph reported in a March 2021 press release. In effect, in “lending” your cryptocurrency tokens to Vauld, you would generate a yield. However, the company effectively owns your assets.
Its rates were competitive with Celsius, BlockFi and Nexo — one of which still continues to function. Due to Independence Day in the United States, Nexo may experience delays to customer transactions