Following financial issues, a cryptocurrency platform suspends operations.
What Cause the Vauld's 'Financial Challenges'
According to a news report by TechCrunch, as it traverses "financial challenges," Singapore-based cryptocurrency lending and exchange firm Vauld has paused withdrawals, trading, and deposits on its platform.
The company claimed that the market slump is posing financial difficulties for it, and since June 12, customer withdrawals have totaled around $198 million. According to the company, the crash of Terraform Lab's UST stablecoin, the suspension of withdrawals by the Celsius network, and the financial default of Three Arrows Capital were the main causes of the cryptocurrency market's decline.
Darshan Bathija, the founder and CEO of Vauld, said the company is looking at restructuring opportunities and has consulted with Cyril Amarchand Mangaldas and Rajah & Tann in Singapore and India for legal counsel as well as Kroll for financial advice.
The company said that it is confident to find a solution that best safeguards the interests of Vauld's stakeholders and consumers with the help of its financial and legal advisors.
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Crypto-Trading Platform Vauld
Bathija and Sanju Kurian founded Vauld in 2018, which offers cryptocurrency lending and deposit products. In July of last year, it received $25 million in a Series A funding round spearheaded by Peter Thiel's Valar Ventures. Coinbase Ventures additionally took part in the funding, as per Bloomberg.
On its website, Vauld states that it offers 12.68% yearly returns on staking several so-called stablecoins including USDC and BUSD and 6.7% on Bitcoin and Ethereum tokens. It promises to give the "industry's highest interest rates on major cryptocurrencies." Customers could borrow money against their tokens via the platform, which also provided access to a number of additional trading services.
Vauld's website also claims that the company gives users the option to borrow money against their tokens up to an LTV (loan to value) of 66.67% and "instantly" accepts loans.
Vauld Cut Its Workforce
The announcement comes two weeks after Vauld reduced its staff by 30%.
We are working with each person affected and:
— Darshan Bathija (@darshanbathija) June 21, 2022
• Paying them two months of their salaries as a severance payment and ensure that they retain their signing and/or joining bonus
• Provide 12 months of medical insurance for their family
• Help them find a great place to work
According to Bathija, the company will ensure that the impacted employees keep their signing and/or joining bonuses and will give them two months' worth of their salaries as a severance payout. Vauld will assist them get another job and give their family medical insurance for a whole year.
Recent Crypto Crash
CNBC reported that investors have been scared off by the chaos, which has wiped more than $2 trillion in value in a matter of months and ruined the life savings of individual traders who placed large bets on cryptocurrency ventures marketed as safe investments.
According to economists and bankers who spoke with CNBC, the overall U.S. economy will not be negatively affected by the crypto sell-off. Joshua Gans, an economist at the University of Toronto claimed that the crypto crash is not a major concern for the U.S. economy because people don't really use cryptocurrency as collateral for debts in the real world. This would just be a lot of paper losses without that.
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