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Distressed Crypto Exchange Vauld Files for Protection Against Creditors

Vauld Logo

One of the cryptocurrency businesses most adversely affected by the poor macroeconomic conditions is Vauld, which has filed a claim in Singapore for protection from creditors. The process should give the company the “breathing space” to restructure its underperforming initiatives.

Trying to Find a Solution

Vauld, a Singaporean exchange for digital assets, is one company that is simple to presume has suffered losses from the crypto winter. The Coinbase- and Valar Ventures-funded firm stopped accepting trades, deposits, and withdrawals last month.

Shortly after, it laid off close to 30% of its workers and cited the extended market downturn and economic recession as the cause.

Recent WSJ reporting claims Vauld would request creditors’ protection to reduce the turbulence. The process is extremely similar to Chapter 11 bankruptcy in the US.

The debtor is given more time to resolve its financial problems while still being in charge of its operations. In Vauld’s illustration, the moratorium should give the company the necessary “breathing space” after all the bad events:

The management has determined that applying for a moratorium order would be in the best interests of all stakeholders, including creditors, given the current situation. This is done to allow Vauld management and Defi Payments [its Singapore entity] the breathing room they need to prepare for the envisaged restructure for the good of all stakeholders.

It’s crucial to remember that Three Arrows Capital is situated in Singapore and is another company dealing with significant issues during the current bear market (3AC). Most digital currencies’ declines in value and the failure of Terra’s algorithmic stablecoin (UST) and native token were the main causes of its problems (LUNA).

Last month, the cryptocurrency hedge firm failed to meet margin calls. A few days later, a British Virgin Islands court ruled that it should be dissolved. A few of 3AC’s creditors include BlockchainCom and Voyager Digital, which are considered a serious setback for the industry. According to some sources, the company has 27 businesses worth nearly $3.5 billion.

Can Nexo Prevent the Sinking of Vauld?

Vauld’s issues have been watched by bitcoin lender Nexo, who may soon acquire it. The two parties agreed upon a 60-day exclusive exploratory period based on the idea. Nexo will eventually purchase the entire Singaporean company if the agreement is successful.

Darshan Bathija, co-founder and CEO of Vauld, thought that the acquisition might improve investor protection and address some platform issues:

“Operating under the Nexo brand puts us immediately in a position of strength to continue the execution of our fiduciary commitments to our customers while simultaneously executing upon both firms’ ambitious roadmaps, independent of the market conditions,” the company said.