Vauld, a troubled cryptocurrency lending platform, has been granted an additional term creditor protection by a Singapore court. The business will need to come up with a plan for its reemergence before February 28th.
Bloomberg published a story on 17 January that Vauld was given more than a year to complete its discussions with one digital-asset manager in order to assume executive management of tokens trapped on its platform. The argument that discussions had reached an advanced stage was enough to convince the Singapore High Court.
In July 2022 the site stopped processing withdrawals for 800,000 clients. It claimed that poor market conditions and an unusually high number of withdrawals in less than two weeks were the reasons.
It was previously granted a three-month moratorium in order to prepare a restructuring plan and better serve its creditors. This will be completed by August 2022. This was done to stop the company going bankrupt. At the time, the court rejected the request of the company for a six month protection period. It expressed concern that the longer moratorium would not have adequate oversight and monitoring. The judge’s decision is still in force.
The first moratorium was in effect when it became clear that Nexo (a cryptocurrency lender based in Switzerland) planned to acquire Vauld with all its assets.
Vauld however denied that any transaction of this nature could have taken place after Nexo’s Bulgarian office was searched by authorities.
The ban was placed on August 20, 2022 by Zipmex, a prominent platform based in Singapore. It was intended to resolve liquidity concerns.
A proposal by the central banking of Singapore to ban digital payment token service providers extending credit facilities to customers is threatening the future of cryptocurrency lending in the country. This proposal would be applicable to fiat as well as cryptocurrency lending.