Vauld Reveals Extent of Cash Shortfall – Updates Nexo Deal

Vauld and Nexo
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Singapore-based crypto lenders Vauld have released an update regarding a potential buyout by crypto lending giant Nexo. 

In an email to its clients, Vauld has advised that it applied for a moratorium in the Singapore courts on Friday July 8th, under section 64 of Singapore’s Insolvency, Restructuring and Dissolution Act 2018.

If granted, the moratorium will protect Defi Payments Pte Ltd (Vauld’s actual company name) from its creditors for a minimum of six months (and can be extended with the court’s agreement). While the moratorium is in place, no order to wind the company up can be issued and nobody can bring any proceeding against the company.

During this time Vauld says it will be working on a restructuring plan and assisting Nexo in conducting due diligence in regards to a potential buy-out of the failed lender.

In the email, Vauld provided the following update on its financial status, saying the company had assets of $330 million and liabilities of $400 million. It blamed its failure and the suspension of customer withdrawals on;

  • Mark to market losses on BTC, ETH, and MATIC trades and exposure to the failed UST US dollar stablecoin.

  • The repayment time frames of some of its lending “we have committed a significant proportion of our AUM towards loans with a tenure of another 3-11 months that can’t be recalled early.”

The company says its court filing should not be viewed as a first step to “winding up or shutting down the company” and that its top priority currently is “to complete the due diligence process with Nexo.” If the Nexo purchase does not go ahead, Vauld says it is also considering a range of backup options including

  • Raising more venture capital
  • Exploring alternatives to a complete acquisition
  • Waiting for some of our deployed capital to be returned
  • The possibility of converting debt to equity
  • Issuing its own token
  • Developing a payment plan tied to future revenue

At the time of writing no date, has been set for a hearing on Vauld’s application for a moratorium.

Article originally published at Brave New Coin.