Crypto Lender Vauld Gets Extended Creditor Protection

Negotiations with potential crisis managers have reached an "advanced stage," according to the company.

Embattled crypto lending platform Vauld has been granted another period of creditor protection from a Singapore court. It should present a revival plan by Feb. 28.

As reported by Bloomberg on Jan. 17, Vauld has been granted a month to close negotiations with one of two digital-asset fund managers to take control of the tokens stuck on its platform. The Singapore high court appears to have been satisfied with the company’s claim that negotiations are at an advanced stage.

In July 2022, the platform stopped allowing withdrawals for its 800,000 customers due to unfavorable market conditions and an unprecedented amount of $200 million worth of withdrawals over two weeks. The company then requested a six-month protection period in August, but this was denied by the judge out of fear that it would not receive adequate management or oversight. Instead, it received a three-month moratorium to form a restructuring plan and provide creditors with an improved result.

In the first moratorium, Nexo, a Swiss-based crypto lender, was rumored to be interested in acquiring Vauld. However, after Nexo’s Bulgarian office was raided by police, Vauld denied this was possible.

Another major Singapore-based crypto platform, Zipmex, received a three-month moratorium in August 2022 to resolve liquidity issues.

As of now, Singapore’s central bank plans to ban digital payment token service providers from offering “any credit facility” to consumers, including fiat and cryptocurrencies.