Vauld, the Indian cryptocurrency lending platform facing financial trouble, has applied for a six-month moratorium for restructuring as it is $70 million short for paying off its debts.
Despite its current inability to pay off its liability, CEO Darshan Bhatija has promised existing customers that they would continue to keep earning interest on their holdings, which are currently locked up on the exchange. The platform claims to have $330 million in assets against a current liability of $400 million.
Bathija explained the discrepancy as a result of its exposure to the TerraUSD crash as well as a plunge in value of other key cryptocurrencies like Bitcoin and Ethereum.
Vauld revealed in a statement that the moratorium was requested to block any order to wind up the platform as well as any proceedings against them for a period of six months.
The way ahead
Apart from the ongoing restructuring plans, the company is in talks with lending platform Nexo for a 100 per cent acquisition, as previously reported by Business Today.
In case the deal does not pan out, the exchange announced that they are ready to explore alternative options.
The exchange said in a statement, “While we’re very optimistic about joining forces with Nexo, on the off chance that we can’t make it work our plan will include a combination of – raising more venture capital, exploring alternatives to a complete acquisition, wait for some of our deployed capital to be returned, the possibility of converting debt to equity, issuing our own token and/or developing a payment plan tied to future revenue.”
What happened at Vauld?
In a blog posted on the exchange’s official website last week, Bathija broke the news that due to financial challenges, the crypto exchange is suspending all trading, deposits, and withdrawals.
Last month, the exchange also let go of 30 per cent of its non-tech employees, blaming the general economic downturn.
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today