Crypto lender Vauld halts withdrawals and deposits weeks after promising not to
Following company layoffs and promises of continued user withdrawals, Vauld CEO Darshan Bathija has announced the suspension of customer trading due to “volatile market conditions,” “financial difficulties with key business partners,” and the “current market climate.”
Vauld crypto exchange is backed by the likes of PayPal’s co-founder Peter Thiel and his firm Valar Ventures, along with Coinbase Ventures and Pantera Capital to name a few.
In a statement on Monday, Bathija said customers are withdrawing around $200 million from the exchange in response to the “collapse of Terraform Lab’s UST stablecoin, Celsius Network pausing withdrawals, and Three Arrows Capital defaulting on their loans.”
As result the CEO says that in the interest of its investors, Vauld must take immediate action:
- Vauld will be hiring financial advisors from Kroll Pte Limited and legal advisors from India and Singapore.
- A restructure is planned alongside an application for a moratorium in Singapore which will grant Vauld temporary legal protection from any proceedings against them.
- Most importantly, they’re freezing trading, withdrawals and deposits on the platform immediately.
The only exception will be made for customers using the crypto exchange to meet margin calls in connection with collateralized loans.
Just over two weeks prior to this announcement, Vauld reassured users currently caught in the ongoing crypto winter that any future withdrawals are safe. The crypto exchange claimed it will retain it’s liquidity with zero exposure to Celsius or Three Arrows Capital.
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In a statement on June 16, Bathija said, “We understand that these are trying times for crypto investors, but Vauld continues to operate as usual despite volatile market conditions.”
Then 5 days later, Vauld laid off 30% of its total workforce, a fortnite before the upcoming withdrawal suspensions.
Several other centralized finance exchanges are also facing difficulties with liquidity:
- Celsius once had $28.6 billion to its name before it collapsed 88%, and now it’s suspending withdrawals to avoid potential insolvency.
- Coinbase is laying off staff while Goldman Sachs predicts the company could lose 60% of its profits.
- Voyager also suspended customer withdrawals.
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