Vauld Receives Extended Creditor Protection as Revival Plan Looms

Crisis Mode: Vauld’s Ongoing Struggles

The crypto world can feel a bit like a rollercoaster, and for Vauld, it’s been a particularly dizzying ride. The Singapore court, in its infinite wisdom, has granted Vauld another reprieve in the form of an extended period of creditor protection, but don’t pop the confetti just yet! A revival plan is due by February 28, which has most stakeholders holding their collective breath.

The Road to Negotiation

According to a recent Bloomberg update, Vauld has more time to negotiate with digital-asset fund managers regarding the control of the frozen tokens—approximately 800,000 customers are anxiously waiting for better news. These negotiations are reportedly in an “advanced stage”, which sounds promising, though we’ve all heard that kind of talk before, haven’t we?

A Flashback to Withdrawal Woes

Flashback to July 2022, when the phrase “unfavorable market conditions” was the top contender for the most popular excuse of the year. Amid an astonishing $200 million in withdrawals within a fortnight, Vauld locked the vault and halted all withdrawals for its user base. Spoiler alert: no one was happy about that.

The Nexo Dilemma

Interestingly enough, during this tumultuous time, rumors about Nexo, a Swiss crypto lender, stepping in to sweep Vauld off its feet swirled around. Unfortunately, those dreams were dashed after Nexo’s Bulgarian office was subjected to a police raid. After that, Vauld publicly nixed the idea of partnering up with Nexo—talk about a bad breakup!

Regulatory Gray Area

Let’s not forget the broader context—Singapore has been flexing its regulatory muscles recently. In August 2022, Zipmex also received some time off from the regulators to sort out its liquidity mess. However, the ever-watchful central bank of Singapore has been toying with the idea of disallowing digital payment token providers from extending any credit facilities to consumers. So, while Vauld hops on the negotiation merry-go-round, the rules of the crypto lending game could be changing completely.