Vauld, a Singapore-based crypto-trading platform, has suspended withdrawals and deposits on its platform with immediate effect, less than a month after laying off 30% of its workforce, the majority of whom were based in India.
Cryptocurrency exchange Vauld has suspended deposits and withdrawals on its platforms, citing “financial challenges” in the midst of the volatile crypto market. Vauld, founded in 2018 by Bathija and Sanju Kurian, offers a suite of products to cryptocurrency investors. Fixed deposits and asset-backed lending and borrowing platforms are examples of this. We investigate why Vauld has ceased operations (withdrawals and deposits).
In a blog post, Vauld management stated that despite its best efforts, the company is facing financial challenges. When the cryptocurrency market fell due to the collapse of Terraform Lab’s Terra-Luna stablecoin, the Celsius network paused withdrawals, and Three Arrows Capital defaulted on their loans, the crypto company reported a significant amount of customer withdrawals.
The three-year-old company, which has raised approximately $27 million in funding from investors such as Pantera Capital, Coinbase Ventures, and Peter Thiel-backed Valar Ventures, claimed that the market collapse has forced customers to withdraw approximately $198 million since June 12.
Vauld is currently in talks with prospective investors. To give the company breathing room to carry out the proposed restructuring exercise, the company intends to apply to the Singapore courts for a moratorium, which is a suspension of the commencement or continuation of any proceedings against the relevant companies.
Vauld appeared to be in trouble earlier this month when it announced that it would reduce its workforce by 30% in June. In addition, the company stated in the release that it was cutting marketing expenses, hiring efforts, and executive salaries by 50%. The business has justified this by citing the economic downturn.
How To Withdraw Money From Vauld??
The problematic question is how to withdraw your money or cryptos from Vauld. In reality, we do not know the answer yet. Since Vauld suspended all crypto/fiat deposits or withdrawals so users can not even transfer their crypto to another wallet.
Also Read: Tether Denies Rumors On Its Commercial Paper Holdings & Exposure to Celsius
Many celebrities & YouTubers promoted Vauld as a risk-free crypto FD. But seeing the current scenario users are really scared about what will happen to their funds. Users are questioning that if Vauld is secured by BitGo then there is no issue providing the funds back to users. Unless there is something serious going on.
Binance CEO Takes A Dig At Vauld. In a tweet Binance’s CEO Chengpang asked the users to be alerted while doing business with platforms that require VC funding.
Unpopular opinion: careful when using platforms that require VC funding, they often don't have a real business model yet.— CZ 🔶 Binance (@cz_binance) July 4, 2022
(over generalization, there are exceptions of course)https://t.co/lI1pvdPdKr
As per Deepak Shenoy Founder, CEO, @capitalmind_in, Vauld is dead. In a tweet he said
Vauld is dead. It was a crypto startup offering a “yield” on a coin that technically had limited supply. Meaning:if you can’t create new coins what’s the point of yield? At scale you’re dead.
Pranjal Kamra, Another prominent Financial expert and youtube said that Govt. control over money is better than this type of plat who goes bankrupt every now and then.
In the meantime, Nexo, Another crypto exchange is looking to acquire Vauld. However this is a speculative news as of (5-Jul-2022)
The Upcoming Result
As per Vauld’s corporate statement,
We are not sure whether users who deposited their hard-earned money will get back anything at all. However, we can expect some govt. intervention on this matter.