Crypto Lender Vauld Halts Withdrawals as Market Dips

Crypto lender Vauld halts withdrawals amid market dip and prolonged bear run in the crypto space.

On Monday, cryptocurrency lender Vauld halted all deposits, trades, and withdrawals from its platform and said it was looking into possible restructuring alternatives.

According to the Singapore-based firm, it is collaborating with its financial and legal consultants to “explore and analyze all possible options, including potential restructuring options that would best protect the interests of Vauld’s stakeholders.”

Vauld,Crypto Lender
Photo Credit: Financial IT

In a blog post published on Monday, Vauld CEO Darshan Bathija stated that the company is facing “financial challenges” due to “volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate” this caused users to withdraw more than $197.7 million since June 12 as a result of this new development.

Vauld has become the newest victim of this year’s collapse in crypto values. The second quarter of this year had Bitcoin’s lowest quarterly performance since 2011. Over the course of three months, the market value for cryptocurrencies lost billions of dollars.

The cryptocurrency market downturn has revealed weaknesses in a number of projects and business plans. The algorithmic stablecoin terraUSD crashed in May, devaluing its sibling currency, luna. In the meantime, Three Arrows Capital, a significant cryptocurrency hedge fund, went out of business after missing its payment on a more than $660 million loan from Voyager Digital.

Less than three weeks after CEO Bathija stated that the company would stop taking withdrawals, Vauld “continues to operate as usual despite volatile market conditions.” Bathija said in a blog post on June 16 that withdrawals were “processed as usual, and this will continue to be the case in the future.”

The liquidity of crypto loan companies like Vauld has been a problem. Last month, Celsius stopped client withdrawals due to “extreme market conditions.”

Vauld says the company is “in discussions with potential investors.” The firm said that it had appointed Kroll Pte Limited as its financial advisor, Cyril Amarchand Mangaldas as its legal counsel in India, and Rajah & Tann Singapore LLP as its legal advisor in Singapore.

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For instance, bitcoin values have now demonstrated some pattern and seem to decline in value to varying levels in the spring before rising again in the early summer. Past performance, however, is not a guarantee of future outcomes, as is true of all investments, let alone those made in the uncertain realm of cryptocurrencies.

He urges individuals who are determined to “buying the dip” to choose a monthly budget that they feel comfortable sticking to and not to worry too much about price fluctuations over the following two years.

It’s dangerous to purchase cryptocurrencies at any price, let alone one that may turn out to be a long-term trend due to the volatility of the cryptocurrency markets. Prices might go back to where they were, but they also might drop significantly more, leaving your investment in the red.

If history is any indication, this dip or crash, depending on your point of view, may recover like it did the year before, when prices dropped to a similar level before rising to their pre-dip levels and even peaking in the fall. Understandably, however, they might not.

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