Financially embattled cryptocurrency lender Vauld has been granted a three-month moratorium on legal proceedings from creditors by the Singapore High Court.
The company, which had to suspend operation to deal with liquidity shortages, now has time to see if it can realistically come back stronger or follow a path similar to that of the Celsius Network.
The court seeks to give Vauld sufficient time to get its business in order. This decision will shield the company from creditors who may be seeking or starting legal proceedings – at least for the time being. The firm will have until November 7 to come up with a way to restore investors’ trust.
Among the possible solutions is an offer from competitor Nexo to acquire 100% of Vauld. Whether this deal goes through will depend on several factors. Meanwhile, the court has not ruled out the possibility of creditors needing to act.
That is why the Singapore High Court has asked creditors to form a committee so their interests may be better represented and protected. According to creditors, Vauld owes them $400m.
The company saw $198m in withdrawals between mid-June to early-July which prompted it to suspend all deposits, withdrawals and trading.
The company also confirmed that it was laying off 30% of its staff in a bid to cope with the situation.