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Crypto firm Vauld freezes withdrawals in turn



Crypto firm Vauld has announced that it is suspending customer withdrawals, transactions and deposits. About 800,000 users are affected.

Nearly $200 million withdrawn since early June

The problems in the cryptocurrency space are piling up. After Celsius, Finblox and CoinFlex, the Vauld lending platform is in turmoil. Singapore-based virtual currency exchange and lending platform Vauld announced a withdrawal freeze on Monday, just three days after Canadian rival Voyager.

Founded in 2018, Vauld is a cryptocurrency lending platform with approximately 800,000 customers. As a reminder, staking services are interest-based cryptocurrency loans on the blockchain. Vauld offers returns on dozens of cryptocurrencies with interest rates of up to 40%.

The company said Monday, July 4, 2022, that the decision came amid “financial challenges.” The startup is young and has been around for three years. Despite her young age, she managed to make a name for herself in the cryptocurrency industry.

Investors in the company include Valar Ventures, Coinbase Ventures, and Pantera Capital. She has raised around $27 million, but recently said she was facing financial difficulties. As with previous times, we are still dealing with a young crypto startup that can no longer sustain huge withdrawals from its customers.

These difficulties are related to the cryptocurrency bear market. According to Vauld, this complexity in the crypto world has resulted in client withdrawals totaling approximately $198 million since June 12, 2022.

Vauld founder and CEO Darshan Bathija said the startup was exploring restructuring options and had obtained financial advice from Kroll and Cyril Amarchand Mangaldas. Rajah & Tann in India and Singapore provided legal advice.

To justify its decision, the company cited difficult market conditions, the “financial difficulties” of its main trading partners and recent events that shook the crypto ecosystem: the collapse of the stablecoin terra usdt (ust) of the Terra blockchain, June 12 freezing of withdrawals from Celsius, payment defaults from investment fund Three Arrows Capital.

The crypto ecosystem is shaken to the core

Companies that offered high yields are the first to be affected
The general decline in cryptocurrencies, particularly at the end of the first half of the year, also weighed on investor sentiment. Bitcoin has lost nearly half of its value in just two months, dropping from $46,000 in early May to under $20,000 today.

UOS, the virtual currency created by Ultra and backed by video game developer Ubisoft, is now worth only $0.25, while at the end of 2021 it was showing a price of $1.72, leading to significant losses for people who have invested in it.

Faced with the collapse of the world of virtual currencies, the European Central Bank has called for faster regulation. The European Commission last week announced a package of measures to regulate the industry.

But the central bank fears that the laws the state imposes on banks and cryptocurrency firms could create a chaotic patchwork before European rules come into force in 18 months.

At a meeting of its supervisory board on Tuesday, the central bank is expected to stress the urgent need for countries in the region to harmonize rules, reports the Financial Times daily.

As CZ said, many crypto startups will continue to default until the market recovers. Among other things, companies offering attractive returns are the first victims of this market downturn.

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