Vauld disclosed a $70 million shortfall to its creditors, days after the crypto platform suspended withdrawals, deposits and trading activities for its users.
Media reports confirmed the asset-liability mismatch, with the struggling exchange seeking a six-month moratorium on redemptions.
The asset-liability mismatch
The company’s CEO and co-founder, Darshan Bathija, told investors: “At a group level, Vauld has assets worth around $330 million and liabilities worth around $400 million. million right now,” adding that parent company Defi Payments has requested the moratorium.
Bathija also disclosed that there is a mismatch in loan tenure as a large portion of its assets under management (AUM) is due within the next three to 11 months and cannot be recalled early.
“We have a mismatch of Defi Payments assets and liabilities where the main contributors to the gap were market losses on BTC, ETH and MATIC transactions and exposure to UST,” he explained. .
On the moratorium front, Defi Payments has registered under Section 64 of the Insolvency, Restructuring and Dissolution Act 2018 with the Courts of Singapore. “I want to make it clear that this filing does not mean that we are liquidating or closing the business,” Bathija added. He emphasized the platform’s restructuring strategy in the meantime.
Be[In]Crypto previously reported that crypto lender Nexo could potentially be in the process of acquiring Vauld. The platform said the focus was on completing the due diligence process with Nexo while developing a repayment plan for Vauld’s creditors.
Vauld in the hot seat
Earlier this month, Vauld signed an indicative term sheet that granted an exclusive 60-day exploratory period for Nexo to perform due diligence. The London-based company plans to acquire up to 100% of the Singapore-based company.
However, if the deal with Nexo does not materialize, Vauld would consider raising venture capital funds, seek another acquirer, partly wait for a return on deployed capital, convert debt into equity, issue its own token or would develop a payment plan tied to the back of future revenue forecasts.
Meanwhile, the Singapore-based exchange is facing market losses amid the crypto downturn and bearing the brunt of the algorithmic collapse of stablecoin TerraUSD (UST).
All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.