Coinbase-backed crypto exchange Vauld suspends operations due to "financial challenges"
Last month, crypto lending platform Vauld announced that it was reducing its workforce by 30 percent due to the current economic downturn.
Crypto exchange platform on Monday announced that it had suspended all withdrawals, trading, and deposits on its platform due to “financial challenges”. According to multiple media reports, there have been customer withdrawals of nearly $198 million since June 12.
In a company statement, Darshan Bathija, CEO at Vauld, stated,
"We have made the difficult decision to suspend all withdrawals, trading, and deposits on the Vauld platform with immediate effect. We believe that this will help to facilitate our exploration of the suitability of potential restructuring options, together with our financial and legal advisors."
"We seek the understanding of customers of the Vauld platform that we will not be in a position to process any new or further requests or instructions in this regard. Specific arrangements will be made for customer deposits as may be necessary for certain customers to meet margin calls in connection with collateralised loans," he added.
Vauld plans to appeal before the Singapore courts for a moratorium. Darshan said in the statement, “We are confident that, with the advice of our financial and legal advisors, we will be able to reach a solution that will best protect the interests of Vauld’s customers and stakeholders.”
Crypto entrepreneur and Coin Crunch India CEO, Naimish Sanghvi, turned to Twitter to express his disappointment with the decision.
Changpeng Zhao, CEO of crypto exchange platform , also took to Twitter to alert users to be careful when using platforms that require VC funding.
The Singapore-headquartered crypto lending platform was founded in 2018 by Darshan Bhatija and Sanju Sony Kurian. The startup provides its users with a customer-centric banking solution by leveraging blockchain.
Recently, centralised finance (Ce-Fi) platforms including Celsius, Voyager, and BlockFi also announced halting withdrawals.
Previously, on June 21, Vauld announced that it was reducing its workforce by 30 percent due to the current economic downturn.
Following the layoffs, Bybit, a Singapore-based cryptocurrency exchange, announced it would lay off 2,000 employees—around 30 percent of its workforce—as part of its efforts to manage costs amid the crisis. Earlier, in June, global crypto exchanges and firms including Coinbase, Gemini, Robinhood, BlockFi, BitMex, Crypto.com, and Bybit announced that they are downsizing their workforce due to the current crypto crisis led by uncertainties in the financial markets as a result of macroeconomic factors such as the war in Europe, rising global inflation, and supply chain bottlenecks.