- Singapore-based Vauld is the latest crypto lender to freeze all transactions on Monday.
- Multiple high-profile collapses of Singapore-based crypto firms is forcing the city-state’s regulators to take a closer look at the sector and may see fresh regulations being implemented.
As contagion from the collapse of algorithmic stablecoin TerraUSD and its sister token Luna, as well as cryptocurrency hedge fund Three Arrows Capital continues to spread, Singapore-based crypto lender Vauld has become the latest firm to halt transactions.
This week, Vauld halted all withdrawals, trading and deposits on its platform and is currently scouting for potential restructuring solutions, according to the firm.
Vauld is also known to have engaged Kroll as its financial advisor and lawyer Cyril Amarchand Mangaldas as its Indian legal advisor as well as Singapore law firm Rajah & Tann to advise on Singapore legal matters.
Vauld CEO Darshan Bathija stated in a blog post on Monday that the firm is experiencing “financial challenges” which stemmed from “volatile market conditions” and the issues with the firm’s major business partners.
Vauld’s customers withdrew close to US$200 million the crypto lender’s platform since June 12 before it halted all transactions halt this week.
According to a Bloomberg report, Vauld is said to be in discussions to be bought by rival Nexo, which is currently conducting a 60-day due diligence process on the firm.
Vauld is the latest domino to fall as crypto lenders resort to emergency financing and bailouts amidst a US$2 trillion cryptocurrency market rout, creating a smorgasbord of opportunities for well-funded crypto firms to sweep in and pick up assets at pennies on the dollar.
In an interview with Bloomberg, Nexo co-founder Antoni Trenchev suggests that Vauld may have been responsible for its own predicament,
“It was built out correctly, unfortunately turns out they made some bad investment decisions, but the company as such is interesting as it has a lot of traction in India and Southeast Asia.”
According to Trenchev, who did not elaborate on what investment decisions Vauld made that were questionable, Vauld is said to have “hundreds of millions” in assets under management, well down from the firm’s earlier target of US$5 billion.
Bitcoin, the world’s largest cryptocurrency by market cap saw its worst quarterly performance since 2011 in the second quarter of this year.
But the recent high-profile fallout of many Singapore-based crypto entities is forcing the city state’s regulators to take a closer look at the sector.
Just hours after Vauld’s announcement on Monday that it would be freezing transactions, Singapore’s central bank said that it was mulling fresh cryptocurrency rules to protect consumers.
In a written response to a question from Singapore’s parliament, Monetary Authority of Singapore Chairman Tharman Shanmugaratnam said,
“These (rules) may include placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies.”
