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Defi Payments Ltd, the parent company of troubled cryptocurrency lending platform Vauld. He has been granted a short reprieve from creditors after being granted a three-month moratorium by Singapore’s High Court on Monday 1 August. It is said that the moratorium will provide the company with the necessary breathing room to form an adequate restructuring plan.
Defi Payments had originally sought a six-month moratorium, but was reportedly denied by Justice Aedit Abdullah on Monday, citing concerns that an extended period of suspension “will not have adequate oversight and monitoring,” according to a report by Bloomberg. The granted protection is said to last until November 7, 2022. The judge further emphasized that a further extension may be possible, but will be based on an assessment of the company’s progress in dealing with creditors. As it stands, Vauld owes more than $400 million to its 147,000 creditors – of that total, 90% percent comes from deposits from private investors.
Under the moratorium, Defi Payments would receive protection from winding-up resolutions, the appointment of a receiver or administrator and any legal proceedings that could be brought against the company by any of its 147,000 creditors.
Vauld updated its website’s FAQ and said the moratorium would give it the breathing space it needs to formulate a restructuring plan for the business to ensure a better outcome for its creditors.
The moratorium is an important process to provide the company with the necessary breathing space to formulate and carefully consider its options.
Without the necessary relief granted, it would be “highly unlikely” that creditors would receive even a fraction of the value of their account, the company further said. Vauld halted all customer withdrawals last month for its 800,000 customers, citing adverse market conditions and $200 million worth of withdrawals in less than two weeks. The protections of the moratorium will allow Vauld to present a restructuring proposal to explore options for revitalizing the business.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.
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