October 6, 2022

Troubled cryptocurrency lending platform Vauld received a brief reprieve from creditors after Singapore’s High Court granted it a three-month moratorium on Monday.

According to Bloomberg articleJustice Aedit Abdullah reportedly dismissed Vauld Defi Payment Limited’s parent company initial request for a six-month embargo. This, due to fears that a longer moratorium “would not have enough oversight and monitoring”.

The moratorium will protect Defi Payments from liquidation orders, the appointment of a receiver or administrator and any legal action that may be taken against the business. This will include those actions that may be brought by its 147,000 creditors.

Court orders Vauld to share information

The court ruled that Vauld must provide its creditors with information about its cash flow and the valuation of its assets. The judge ruled that this must be completed in two weeks and that the administration of his accounts must follow in eight. To resolve these difficulties, he also asked the company to set up a committee of creditors.

The moratorium, according to Vauld’s amended website FAQ on Monday, will give the company breathing room to develop a restructuring plan. The company added,

“The moratorium is an important step in giving the company the necessary breathing space to formulate and carefully consider its options.”

While the ban is in place, Vauld plans to develop a restructuring strategy and examine the possibilities of revitalizing the business.

The company will provide creditors with a comprehensive Explanatory Statement detailing its estimated recovery and repayment options.

Lots of work ahead

Despite the company’s optimism, co-founder and managing partner Antoni Trenchev said:

“We need to understand the liabilities, the claims, who the counterparties are and what the prospects are for receiving those claims.”

Here, it is worth noting that at one time, Vauld was promising 13% profit. Leveraged lending and overstretched positions were the results, and it all collapsed in May along with the Terra stablecoin ecosystem.

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