According to a blog post from Vauld, there is an asset-liability mismatch, and the ailing exchange is requesting a six-month payment suspension.
Unbalanced Asset-liability
Darshan Bathija, the CEO and co-founder of the business, informed investors that the parent firm Defi Payments had applied for the moratorium and that “On a group level, Vauld has assets worth ~$330 million and liabilities worth ~$400 million at this time.”
A considerable amount of Bathija’s assets under management (AUM) are due in the next three to 11 months and cannot be recalled early, indicating that there is a mismatch in loan tenure.
“We also have a mismatch of tenure where we have committed a significant proportion of our AUM towards loans with a tenure of another 3-11 months that can’t be recalled early.”
“We have a mismatch of assets and liabilities of Defi Payments Pte Ltd where the main contributing factors to the gap have been mark to market losses on BTC, ETH, and MATIC trades and exposure to UST”, he said.
Regarding the moratorium, Defi Transfers has registered in accordance with Section 64 of the Singapore Courts’ Insolvency, Reorganization, and Dissolution Act, 2018. Bathija continued, “I want to make it quite clear that this filing does not imply that we are winding up or closing the company. In the interim, he focused on the platform’s restructuring approach.
Valuds Recovery Plan Chalked
Vauld’s potential acquisition by Nexo, a cryptocurrency lender, was possible. According to the platform, the focus is on finishing Nexo’s due diligence process while creating a repayment strategy for Vauld creditors.
An indicative term sheet that Vauld signed earlier this month gave Nexo a 60-day exclusive exploratory period to perform due diligence. The Singapore-based company will be acquired by the London-based company up to 100%.
If the agreement with Nexo does not go through, Vauld may consider seeking venture capital investment, looking for another buyer, waiting for a return on invested capital, converting debt to equity, issuing its own token, or creating a payment schedule based on projected future revenue.
In the midst of the crypto bear market, the Singapore-based exchange is struggling with market losses and is bearing the brunt of the algorithmic stablecoin TerraUSD (UST) catastrophe.
