The crypto space witnessed the bankruptcy of some firms due to the prevailing bearish trend in 2022. Without much warning, the crypto winter swept off lots of funds as the value of most crypto assets plummeted. Subsequently, many companies drowned in the storm of chaos and filed for bankruptcy.
Vauld was among the firms impacted by the chain of events of last year. The crypto lending firm struggled following this leading to its suspension of withdrawals on the platform. It later filed for protection from its Singaporean creditors.
Vauld was previously granted three-month protection by its creditors, but a Singapore court has now extended the creditor protection period for Vauld. According to Bloomberg’s report, the court gave Vauld till February 28, 2023, to devise a revival plan on its present negotiations.
Vauld Request For Extention of Creditor Protection Approved
Following its bankruptcy, Vauld has received indications from two digital asset fund managers interested in its assets. They are seeking to take over the remaining Vauld assets. As a result, the crypto lending platform requested more time from the court to handle the details of a potential takeover of its assets.
According to Vauld, the negotiations have moved to the advanced stage and will require more time to conclude. Hence, the Singapore high court approved an extension period of over a month for the firm to complete all the detailed processes in its negotiations.
Vauld halted withdrawals on its platform in July 2022, making it impossible for its over 800,000 users to access their funds. In addition, the lending firm linked its action to the lingering bearish trend in the digital asset market, negatively impacting its general activities.
On July 8, it filed for a six-month moratorium order to help the firm prepare for restructuring its operation and management. Also, the period was for the company to ensure a better decision for its creditors based on their stuck assets on the platform.
However, it only got approval for just three months. The judge mentioned that getting a more extended period for a moratorium could be unproductive. In addition, the judge said it could lack the proper monitoring and supervision it ought.
Nexo showed an interest in acquiring Vauld and its stuck assets from the start of the former moratorium. But the intention of the Swiss-based firm was short-lived. Nexo’s office in Sofia, the capital of Bulgaria, was raided by police. This made Vauld change its mind on the deal with the Swiss-headquartered digital asset lender Nexo.
Singaporean Authorities And Crypto Regulations
Crypto lending in Singapore has been looking hazy recently. Some of the affected companies in the crypto space are primarily based in Singapore. This has put more pressure on the country’s crypto regulatory stances.
Before now, the Singapore authorities have been willing to allow distressed crypto firms to handle their issues. One such company is Zipmex, a Singapore-based platform.
In August 2022, Zipmex received a three-month moratorium grant from a Singapore High Court. This offered the firm protection from creditors within the period, enabling it to fix its liquidity challenges.
The Monetary Authority of Singapore (MAS) is raising proposals for better crypto regulations. Also, it proposes to ban DPTSP (digital payment token service providers) from offering credit facilities as fiat and crypto assets.
Featured image from Bitcoin Wisdom and chart from Tradingview.com