Defi Payments Pte, which runs crypto lending firm Vauld, has filed for a six-month moratorium to restructure the company. The company has assets worth $330 million against $400 million in liabilities, it said in an email to its investors on Tuesday.
“On a group level, Vauld has assets worth about $330 million and liabilities worth about $400 million at this time. We have a mismatch of assets and liabilities of where the main contributing factors to the gap have been mark-to-market losses on BTC, ETH and MATIC trades and exposure to UST,” Vauld stated in the email.
Adding to the mail, Darshan Bathija co-founder and chief executive officer of Vauld said, "I want to clearly state that this filing does not mean that we are winding up or shutting down the company. Instead, we are asking for time to formalize our restructuring strategy so that we can resume operations and give you the best financial outcome.”
The company also has a mismatch of tenure where it has committed a significant proportion of its assets under management (AUM) towards loans with a tenure of another 3-11 months that can’t be recalled early.
Vauld has filed for a 6-month moratorium in the Singapore Courts according to Section 64 of the Insolvency, Restructuring and Dissolution Act, 2018 on July 8.
If the deal with Nexo falls through, the crypto lending platform will explore options like raising additional venture capital, looking at a full acquisition, waiting for some of its invested capital to be returned, converting debt to equity, releasing its own token or considering developing a payment plan tied to future revenue.
The company suspended all its transactions on 4 July, leaving investors stranded. On July 5, London-based crypto lending firm Nexo said it is looking to acquire Vauld.
The fall of the platform has flagged concerns around financial content creators or ‘finfluencers,’ who have promoted the crypto lending platform on social media over time.
Some of the influencers are facing increasing scrutiny and have since released statements on their channel’s community section on YouTube apologizing to viewers who may have been affected. They claimed that they too, had invested money on the platform which is stuck now.
Vauld was founded by Bathija and Sanju Sony Kurian in 2018. The platform lets individuals buy, borrow, lend and trade in cryptocurrencies. The first signs of trouble came on June 21, when Bathija tweeted that Vauld had to lay off up to 30% of the workforce.
Since 12 June, when the crypto market crash was triggered by the collapse of Terraform Lab’s UST stablecoin, Celsius pausing withdrawals and Three Arrows Capital defaulting on their loans, Vauld customers have withdrawn in excess of $197.7 million.
Even so, the decision to suspend withdrawals came as a surprise. In an interview with the Hindu BusinessLine in May, Bathija had said Vauld had $1 billion assets under management.