Vauld seeks moratorium for six months, has liabilities worth $400 million

Vauld, in an e-mail notification to its retail investors, said its parent organisation Defi Payments has filed for a moratorium for six months which will prohibit any proceedings or order for winding up operations.  

The company said that this moratorium is "to prohibit for the period of 6 months, amongst others, any order or resolution to wind up Defi Payments, and any commencement or continuation of any proceedings against Defi Payments."

"This is so as to give Defi Payments and the Vauld management the breathing space it requires to prepare for the intended restructuring for the benefit of all stakeholders," the company said.

Vauld said it has filed the moratorium on July 8. The group company has assets worth ~$330 million and liabilities worth ~$400 million at this time, disclosed the firm. 

Explaining why Vauld filed it, the company said," We have a mismatch of assets and liabilities of Defi Payments Pte Ltd where the main contributing factors to the gap have been mark to market losses on BTC, ETH, and MATIC trades and exposure to UST."

This comes after the company 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. 

In the email notification, Darshan Bhatija, co-founder and CEO 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’re asking for time to formalize our restructuring strategy so that we can resume operations and give you the best financial outcome."

The company said that if its deal with crypto lender Nexo does not go through, it will be looking at other options like raising more venture capital, explore other alternatives for complete acquisition. The company will also look at converting debt to equity or develop a payment plan for future revenue.

“Our highest priority is developing a solid repayment plan to Vauld creditors. We are committed to being upfront with you about everything coming our way and will be sharing frequent updates in the weeks ahead.”

Earlier today, the firm’s chief executive officer in Vauld’s official Telegram channel also said that retail investors will continue to earn interest on their deposits even while withdrawals have been stopped.

Last month, the company laid off 30 percent of its workforce. After the firm paused withdrawals, it triggered panic across the crypto community. 

Vauld was founded in 2018 by Darshan Bhatija and Sanju Sony Kurian, and has till date raised $27.5 million from marquee investors like Coinbase Ventures, PayPal co-founder, and billionaire investor Peter Thiel's Valar Ventures, CMT Digital, Gumi Cryptos, Robert Leshner and Cadenza Capital.