Crypto lender Vauld granted three-month moratorium by Singapore High Court

Crypto lender Vauld granted three-month moratorium by Singapore High Court

 

Embattled Cryptocurrency lending platform Vauld has been given a short period of reprieve from creditors after being given a 90 days moratorium by the Singapore High Court on Monday. 

 

According to a Bloomberg report, Vauld is parent organization, DeFi Payment Limited is initial request for a six-month moratorium was reportedly denied by Singapore High Court is Justice Aedit Abdullah on Monday, citing concerns that a lengthier moratorium “will not get adequate supervision and monitoring.”

 

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Under the moratorium granted, Defi Payments would be protected from wind-up resolutions, the appointment of a receiver or manager and any legal proceedings that could be directed toward the company, including any that could be laid out by its approx. 147,000 creditors. 

 

Vauld claimed in its updated website FAQ on Monday that the moratorium would provide the necessary breathing room to come up with a restructuring plan for the company and perhaps may provide a better outcome for its creditors. 

 

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“The moratorium is an important process to provide the firm with the breathing room necessary for it to formulate and consider its options cautiously.”

 

Vauld said that without the process of moratorium, it would be “highly likely” that creditors might only receive a fraction of their account’s worth.

 

 

While the new protection order expires on Nov. 7, Judge Abdullah said that he will grant an extension if the company is transparent about their progress in repaying creditors.

 

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The Cryptocurrency platform has also been given two weeks to form a creditors committee and provide information around cash flow and valuation of assets to creditors.

 

Exploring the likelihood of minimum withdrawals for their remaining customers has also been recommended by the high court judge. 

 

Vauld banned customer withdrawals last month for its 800,000 customers, citing unfavorable Crypto Market conditions and an unprecedented $200 million worth of withdrawals in under two weeks.

 

Under the protection of the moratorium, Vauld anticipates to formulate a restructuring proposal and explore options to revive its business.

 

The firm plans to present creditors with a restructuring process proposal in the form of a detailed Explanatory Statement outlining an estimate of recoveries and repayment plans that will be made available to creditors.

 

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Eventually, Defi Payments plans to organize a creditors meeting and hold a vote on whether to approve any possible restructuring process; however, there is no set date yet.

 

On July 5, Vauld is Co-founder Darshan Bathija announced on Twitter that Cryptocurrency lender Nexo had signed an indicative term sheet, with the intention of possibly acquiring Vauld’s liability and its assets: 

 

“The completion of this transaction is pending at due diligence — which both teams are working on as we speak. Vauld has strived to deliver long-term value to all customers, and we believe coming under the Nexo umbrella will significantly help both achieve this.”

 

The term sheet grants Nexo a 60-day exclusive exploratory period to conduct due diligence on Vauld is operations before committing to a purchase.

 

If the order of protection expires before the end of the exploratory period, Vauld claims in their website FAQ it could possibly disrupt the deal.

 

After the end of the 60-day period, Vauld will be free to conduct negotiations with other probable investors.