Creditors seek to bar Vauld from another moratorium extension: Report
The troubled crypto exchange Vauld will be seeking a third extension to a moratorium on legal action from its creditors.
Troubled crypto lending platform Vauld is now facing the ire of its creditors who have filed an affidavit to bar the firm from filing for another extension to its moratorium it sought from the lenders.
Vauld, which has sought time to restructure its business and consider bailout options for creditors, is also trying for another extension to its moratorium from the Singapore High Court, according to a report in Moneycontrol.
The Singapore-headquartered crypto exchange was granted an extension on its moratorium from its 147,000 creditors to come up with a revival plan by February 28.
The report noted that the new affidavit was filed with the court by Jonathan Jeremy Edelman, authorised by creditors William Doerrfeld, Samuel Burton, Jeffrey Howerbush, and Brian Murray. Together, Vauld owes about $2.23 million to these individuals.
Coinbase-backed crypto exchange Vauld suspends operations due to "financial challenges"
The affidavit also mentions that its parent, Defi Payments, and Kroll (Defi Payment’s financial advisor) failed to “produce a restructuring scheme acceptable to creditors” in the last seven months, signalling the creditors' rising distrust for Vauld’s Co-founder and CEO Darshan Bathija.
The hearings for this case is expected to start on February 27, Vauld informed its customers.
In August 2022, two months after suspending operations citing financial troubles, Vauld started the Committee of Creditors to consult on the way forward and offer legal representation to creditors.
Vauld was in talks to get bought by London-based crypto lender Nexo, which was called off the potential acquisition in December after allegedly failing to respond to Vauld's due diligence queries.
Overall, Vauld has assets worth around $330 million and liabilities worth $400 million. On August 13, the Enforcement Directorate froze the startup’s bank balances, payment gateway balances, and crypto balances worth Rs 370 crore for allegedly assisting predatory lending apps.
Vauld is backed by popular investors including Coinbase Ventures, PayPal Co-founder and billionaire investor Peter Thiel's Valar Ventures, CMT Digital, Gumi Cryptos, Robert Leshner, and Cadenza Capital.
Edited by Kanishk Singh