Crypto Lender Vauld Fumes As Its $10 Million User Funds Is Stuck In FTX
According to reports, Asia’s largest crypto Lender Vauld has some funds stuck in the FTX crypto exchange platform. The firm revealed that its financial exposure is expected to be worth almost $10 million.
The report added that some of its officials are ‘handicapped’ with almost zero liquidity owing to the current FTX collapse. Vauld’s trade activities executed on FTX turned out unsuccessful.
The platform chose FTX amongst other crypto exchanges as it didn’t have its own order book. Reports reveal that almost a million active users of the Vauld platform are predominantly from the Asian crypto market.
A supposed Vault client was found by India’s Enforcement Directorate (ED) to be involved in an extreme money laundering activity three months ago. Hence, the financial watchdog froze Vauld’s crypto assets worth $46 million.
Furthermore, financial regulators granted Vauld another credit protection extension last week. Hence, it has until January 20 to address its financial woes. By law, Vauld can request another period of extension if needed.
Vauld’s Plans
The Crypto Lending platform also had an agreement with rival firm Nexo about a potential business deal in July. This deal was one of its possible solutions to its liquidity issues.
The business agreement between the crypto lenders was slated for an exclusive due diligence period of 60 days. However, the due diligence term has since been extended twice.
Vauld has scheduled another round of talks with Nexo, Kroll (a financial advisor), and its creditor community. The meeting intends to update the creditors’ community about Vauld’s efforts toward finding the right solution to its problems, including restructuring plans.
In the event of the FTX crisis, many crypto firms are taking alternate measures to curb insolvency in their companies. Hence, Vauld will continue negotiating with Nexo regardless of what happens with its funds stuck with FTX.
It remains confident in the initial acquisition deal as both parties previously agreed. But the Vauld team stated that if the Nexo negotiations were unsuccessful, the company would look into other options.
Such options include issuing a token and raising funds from venture capitalists.
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