The how, what, and why of Vauld suspending its services citing ‘challenges’

ambcrypto.com:

In light of the crypto-market’s recent fortunes, popular lending platform Vauld has halted trading, deposits, and withdrawals. The company’s management disclosed that it is “suffering financial issues” ina blog post on its website. Released a few hours ago, a statement from Vauld CEO Darshan Bathija claimed, 

“This is due to a combination of circumstances such as volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate which has led to a significant amount of customer withdrawals above $197.7 million since 12 June 2022 when the decline of the cryptocurrency market was triggered by the collapse of Terraform Lab’s UST stablecoin, Celsius network pausing withdrawals, and Three Arrows Capital defaulting on their loans.”

Additionally, it declared that “immediate action” would be in the “best interest” of all parties involved. The company will now look at “all relevant options,” including reorganisation and restructuring. These options are important to best safeguard the interests of its stakeholders, the blog added. 

At this moment, users of the platform won’t be able to deposit money into the system or withdraw it. In fact, the firm won’t be responding to any new requests or instructions from users. Furthermore, “special arrangements” will be made for customers to settle margin calls associated with collateralized loans.

The decision to stop withdrawals was made weeks after the company reassured customers that it was solvent and operating normally. Vauld denied having any connection to Three Arrows Capital and the insolvent cryptocurrency lender Celsius in a statement on 16 June.

At the time, it claimed that it “continues to function as usual