A Singapore court has extended the creditor protection for the troubled crypto lending platform Vauld. The company is anticipated to develop a resurrection strategy before February 28.
According to a January 17 report from Bloomberg, Vauld has been given more than a month to conclude talks with one of two digital asset fund managers to assume executive control of the coins that are currently trading on its platform. The Singaporean high court agreed to extend the creditor protection after the corporation was able to convince the court that negotiations have moved to an “advanced level.”
Due to poor market conditions and an abnormally high volume of withdrawals—$200 million—in just two weeks in July 2022, the platform stopped allowing withdrawals for its 800,000 users. It already had a three-month moratorium in place as of August 2022, which it used to create a restructuring strategy for the company and better serve its creditors. The judge at the time declined the lender’s request for a six-month protection period, noting worries that a longer moratorium “won’t get proper oversight and monitoring.”
It was known that Nexo, a cryptocurrency lender with its headquarters in Switzerland, intended to buy Vauld and all of its assets from the start of the first moratorium. The negotiations came to a sudden stop when investigators raided Nexo’s office in Bulgaria. Vauld, however, denied getting involved in this police swoop in any way.
Singapore and Crypto
It’s not the first time that Singaporean authorities have leaned on the side of mercy by being patient and letting troubled crypto firms fix their issues. Another significant platform with a Singaporean base, Zipmex, was given a three-month window of grace in August to address its liquidity problems.
However, the future of crypto lending in the nation is still uncertain as Singapore’s central bank has proposed prohibiting digital payment token service providers from providing “any credit facility” to customers, including both fiat and cryptocurrencies.
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