Thiel-Backed Vauld Announces Freeze on Customer Withdrawals

Crypto exchange and lender Vauld announced Monday it was freezing user withdrawals, becoming the fifth company to do so in less than a month.

“We are facing challenges despite our best efforts,” the Singapore-based firm said in a morning statement. “This is due to a combination of circumstances such as the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate.

“This has resulted in significant customer withdrawals in excess of $197.7 million since June 12,” the company said, attributing “the decline of the cryptocurrency market” to “the collapse of Terraform Lab’s UST stablecoin, Celsius Network pausing withdrawals, and 3AC defaulting on loans.”

“We have considered that it would be in the best interests of stakeholders to take immediate action in the circumstances,” it added. “We have engaged the services of our financial and legal advisors in India and Singapore respectively.”

Vauld raised $25 million last year from investors including billionaire Peter Thiel, Pantera Capital, and Coinbase Ventures. Companies began “freezing” customer assets on June 12, when Celsius Network announced it was halting withdrawals for “our entire community.” Babel Finance did the same on June 17, followed by CoinFLEX on June 23 and Voyager Digital on July 1. KuCoin CEO Johnny Lyu on Friday denied that his company was considering the move after rumors to that effect briefly circulated earlier in the day.

Vauld said Monday it was “fully committed” to exploring “all possible options,” including “potential restructuring options.”

“We intend to apply to the Singapore courts for a moratorium,” the company added. It said the move would “give us breathing space to carry out” any restructuring. “In the meantime, we have made the difficult decision to suspend all withdrawals, trading and deposits on the Vauld platform. … We believe that this will help to facilitate our exploration of the suitability of potential restructuring options, together with our financial and legal advisors.”

More companies could announce similar actions in the days ahead. Binance CEO Changpeng Zhao said Friday his firm was speaking to more than 50 companies looking for bailouts as they went through “a little bit of a liquidity crunch.”