Vauld Group Has $363M in Debts to Pay to Retail Creditors

Image Source: The Block

Embattled Singapore-based crypto lender, the Vauld Group has filed an affidavit that shows a list of its creditors and the amount of liability it is grappling with. According to the court documents, Vauld has as much as $402 million in total liabilities with about $363 million owed directly to retail investors.

The court papers show that the 20 largest creditors on the Vauld platform have a claim of about $125 million, and while about three creditors are owed about $10 million each, the largest single creditor have a claim of $34 million and is an individual.

Most of the retail creditors have an unsecured loan, and they are bound to take less precedence when it comes to bankruptcy or insolvency claims. The Vauld Group declared in the filing that its total assets are pegged at $287.7 million and should its cash in the bank be added, the sum comes in at $357.7.

That the tiny difference between the total liabilities and assets of Vauld Group is somewhat marginal makes the insolvency situation of the company not as grave as those of its competitors like Celsius Network.

Causes of the Vauld Group’s Collapse

As detailed in the affidavit, the first major disruption to its business model came with the collapse of the Terra USD (UST) algorithmic stablecoin in May. With so much of the firm’s funds locked via staking into the protocol, Vauld never really recovered.

The aftermath of the UST collapse has been further compounded by the ensuing market slump which affected some of the coin’s holdings in Bitcoin (BTC), Ethereum (ETH), Polygon (MATIC), and XRP. 

Vauld Group also revealed that it faced a lot of distress as many platforms he lent money to were unable to repay their debt.

“A number of Vauld debtors which had borrowed cryptocurrencies on the Vauld Platform without providing collateral collapsed and defaulted on their loans,” reads the affidavit. As a result, the unexpected bankruptcy of Vauld’s borrowers led to outstanding debts of “about 85 BTC (~US$1.7m) owed to it with little to no hope of recovery.”

Despite its woes, Vauld Group believes bankruptcy is not on the table, and CEO, Darshan Bathija said the company is very committed to closing a deal with Nexo which is currently undergoing a vetting process that is billed to last a total of 60 days.