The last few months have been particularly challenging for many crypto lenders, with top crypto lender Vauld joining the list of companies seeking bankruptcy protection. Vauld, which halted withdrawals earlier this month, is now facing hostile actions from multiple creditors.
In a new affidavit, the crypto lender has received two demand letters and two civil claims from a total of four creditors. One of the letters demands a $340,000 payment plus interest from Vauld.
Unfortunately, the claim amounts from other creditors weren’t included in the signed affidavit. It has been reported that Vauld owes over $402 million to creditors, with over $360 million belonging to individual retail investors. In the first affidavit released by the company, there weren’t any claims of creditor action against the company. The affidavit only mentions letters of claims from investors, which totaled $2 million.
Meanwhile, Vauld filed for a moratorium against its credits in Singapore High Court on July 8. The firm is looking to restructure its debt and is considering a buyout deal from Nexo. They are now seeking to extend the moratorium for six months.
The battle of supremacy
While Vauld is hoping the court grants it the moratorium, experts following the case believe that credit support is the only premise on which the court will grant the moratorium. While the hearing is slated for August 1, pools suggest that nearly 78.3% of creditors supported the application for the moratorium, while 6.5% are against it.
Vauld isn’t the only crypto lender experiencing financial challenges. Top lenders like Three Arrow Capitals, Voyager Digital, and Celsius Network have also suffered a similar fate in the last couple of months. This has intensified calls for regulations of crypto activities.
While Vauld hopes to surmount its current financial challenges and win investors’ trust again, there is no immediate roadmap to how the company plans to pay back investors. And with investors taking hostile actions against the company, it remains to be seen how things will play out in the next couple of days.