Earlier this year in July 2022, Singapore-based crypto lender Vauld suspended withdrawals halting all trading activity on its platform. Since then Vauld has been working on its restructuring, the deadline for which shall be coming soon on January 20.
Vauld was in discussion with crypto lender Nexo, however, they haven’t come to fruition, said Vauld in an email to all the creditors on Monday, December 26. In their latest email, Vauld said that they have been facing “challenges” during the recent months of talk. The crypto lender also said it faces issues of “defamation” and “the spread of misinformation on social media”. Nexo noted:
“We remain dedicated to offering the creditors the most favorable recovery path forward. Nexo is determined to continue working for the benefit of the creditors and to support the development of the blockchain ecosystem.”
Crypto Market Fall Posts Major Challenges to Vauld
Ever since Vauld froze withdrawals this year in July, it has entered talks with Nexo and has hired advisers to explore a potential restructuring. The crypto market fall of 2022 and incidents like FTX collapse, 3AC collapse, have put several crypto lenders out of business.
Some of the top crypto lending institutions like Voyager Digital, Celsius Networks, and BlockFi have also filed for bankruptcies. On the other hand, Nexo too is facing major operational challenges in the wake of regulatory tightening in the crypto space. Earlier this month, Nexo said that it will suspend all its U.S. operations. Besides, it has also cut off access to its “Earn Interest Product” immediately in the eight U.S. states.
With this development, Vauld said that nearly 40% of its customers in the U.S. will not have any benefits of the acquisition. On the other hand, the collapse of the crypto exchange FTX has also impacted Vauld. The crypto lender has over $10 million worth of funds stuck on FTX.
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