Creditors take action against crypto firm Vauld

After a few creditors issued demand letters and claims to Vauld, the crypto lender firm in an email to its creditors and users said that Vauld co-founder and CEO Darshan Bathija has filed a new affidavit in Singapore on July 27 as a 'reply or supplemental affidavit' for its moratorium. 

The email that has been reviewed by Moneycontrol shows that four creditors have commenced originating claims and demand letters against Vauld. Of the four, two were originating claims and two were demand letters.

Under the Singapore law, originating claim means a civil action begins when a party (the plaintiff) files a claim document called an originating process against another party (the defendant).

The affidavit also said that out of a total of approximately 147,000 creditors of Defi Payments, 2,910 creditors have responded until July 26. Further, of the creditors who responded, 2,280 have supported the application and  188 have objected.

The Court had directed Vauld to compile a list of its creditors and if the creditors supports or opposes or takes no position on the application. The affidavit shows that its 7th largest creditor has an outstanding amount of around $3.5 million and has supported the application.

The Court hearing is scheduled to be held virtually on August 1.

The Coinbase-backed firm in its e-mail said that creditors’ affidavits should have been filed by July 25. Also, any written submission will have to be filed by July 28.

Reacting to this, a lot of the creditors criticised the move on Vauld's Telegram channel. Commenting on it, the company said, "The moratorium grants the company a breathing space while we execute our restructuring plans so we would be able to give our users the best financial outcome. Vauld's operations are halted for now, we'd share updates with our users as soon as we have them."

Earlier this month, the company said that its group firm has assets worth around $330 million and liabilities worth $400 million. Vauld stopped withdrawals on July 4 and within a day also said that it had signed an indicative agreement to be acquired by London-based crypto lender Nexo. Besides, the court proceedings, Nexo is still in the process of due diligence as it has a it a 60-day exclusive exploratory period.