On Monday, July 4, 2022, crypto trading and lending platform, Vauld, halted customer withdrawal services from its platform. Darshan Bathija, CEO of Vauld Crypto Exchange, wrote in a blog post that this was due to a combination of circumstances, namely the volatile market situation.
What exactly happened to Vauld?
Vauld was established in 2018 and has over 275 coins listed on its platform. Vauld promotes long-term investing by offering a choice of Systematic Investment Plans (SIPs), interest on cryptocurrency holdings of up to 12.68%, and other benefits to its clients on their money. Vauld received $25 million in Series A funding in July 2021 from companies including Coinbase Ventures, Pantera Capital, and Valar Ventures. Vauld grew its assets under management (AUM) more than ten times and its user base more than 40 times using these funds. They intended to grow their workforce from 40 people to around 200 people.
The majority of Vauld’s users are Indians, who contribute up to around 20% of the AUM and up to $10-15 million per day to the platform’s volume. Vauld receives relatively little or no brokerage revenue, unlike other exchanges, but instead earns large sums through interest by lending cryptocurrency to other businesses, similar to traditional banks. lend money to others.
Users started withdrawing their money from multiple exchanges in panic after the crypto winter, Luna collapse, Celsius saga and 3 Arrow Capital crackdown.
For its part, Vauld cut executive salaries, reduced marketing expenses and 30% of its workforce in June 2022 in order to weather this crypto disaster. In a statement released in June, Vauld said they had never been exposed to 3AC or Celsius before. However, due to the general market malaise and the imposition of the new tax regulations on Indian users, Vauld saw withdrawals of $200 million in the previous 25 days.
Notably, Vauld is now considering reorganization strategies. To this end, it has appointed Kroll as financial adviser, Cyril Amarchand Mangaldas as legal adviser in India and Rajah & Tann Singapore LLP as legal adviser in Singapore.
“Our management remains fully committed to working with our financial and legal advisors to the best of our abilities to explore and analyze all possible options, including potential restructuring options that would best protect the interests of Vauld’s stakeholders,” says Bathija. .
According to Bathija, Vauld is actively talking with potential investors.