Singapore Crypto Lender Vauld Receives Moratorium Extension

Embattled Singapore-based crypto lending startup Vauld has been granted a moratorium extension by the Singapore High Court.

According to a report by The Block, which cited two sources familiar with the matter, the company now has until Feb 28 to explore options to tackle their financial woes.

Vauld has told the Singapore High Court in an affidavit that they are in"advanced stages of discussions" with a number of fund managers.

"There is now clarity to pursue this option of establishing a fund with Vauld's assets as we are unable to accept Nexo's proposals," the affidavit read.

Founded in 2018, Vauld counts Peter Thiel, Pantera and Coinbase among its investors and has raised US$27 million in a Series A round. The platform offered attractive interest rates for users on their cryptocurrencies, including 12.68% annual yields on staking several so-called stablecoins including USDC and BUSD and 6.7% on Bitcoin and Ethereum tokens.

However, in July, Vauld suspended all withdrawals, trading and deposits citing “financial challenges” at the firm. It then applied for a moratorium order in Singapore to create room for the restructuring process. According to court documents, Vauld owed US$402 million to its creditors. 90% of the debt originated from individual retail investor deposits.

Trouble behind the scenes

After pausing withdrawals, Vauld signed an indicative term sheet with Swiss crypto lender Nexo for the latter to acquire up to 100% of the firm. However, it called off the acquisition in December, citing concerns over Nexo's financial health. Last week, Nexo's office in Sofia was raided by Bulgarian police as part of an investigation into suspected money laundering and tax crimes.

In August, the firm was hit with a freezing order by the Indian Enforcement Directorate (ED) in connection with a money laundering case.

Vauld is among 10 firms with alleged Chinese connections, which are under scrutiny by Indian officials for helping to launder Rs 1,000 crore (US$125.65 million), which were sent to overseas wallets. Vauld knowingly allowed the fake loan app to launder the criminal proceedings by not doing KYC or AML, the ED said in a press release.