Justice Aedit Abdullah granted a moratorium to the Singapore-based cryptocurrency lender Vauld Group that would last until November 7. The company will benefit from some relief from the action because its 147,000 creditors will no longer be able to sue the company. The firm requested extra time during the court hearing on Monday.
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Due to “financial challenges” brought on by a steep decline in cryptocurrency prices, the company suspended operations and disclosed considering restructuring options. Vauld now has $400 million in liabilities and $330 million in assets at the group level.
The judge will examine Vauld’s actions in the next hearing
According to reports, the judge stated that after examining the company’s efforts in communicating with its creditors, an extension of the specified period would be feasible. As a result, it has been requested that the company form a creditors’ committee to address the problem. Vauld will now have to give its creditors information on its cash flow, asset valuation, and account management within two weeks and eight weeks, respectively.
In the next hearing, the judge will note the development on orders. Vauld applied for a moratorium against its creditors in the Singapore High Court roughly a month prior to the decision, claiming that it would restructure its debt and explore an acquisition offer from its rival, Nexo. Additionally, a six-month extension of the moratorium was requested.
Early in the month, after stopping withdrawals, Vauld fired 30% of its employees, drastically cut its marketing spending, and even reduced Exec’s salary in an effort to save costs.
The lender disclosed this week that numerous creditors were taking hostile action against it. Co-founder and CEO Darshan Bathija’s statement reveals that four of Vauld’s creditors sent the company two demand letters and two civil claims.
The liquidity crisis became extreme with LUNA/UST’s disaster. The subsequent market downturn, which had an impact on some of the coin’s holdings in Bitcoin (BTC), Ethereum (ETH), Polygon (MATIC), and XRP, made the effects of the UST collapse even more severe.
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