Akanksha Sarma
Akanksha Sarma
Crypto lender Vauld has abandoned the attempt to sell its business to rival Nexo. Liquidation is also not an option. So, how does the platform, which filed for bankruptcy after the Terra collapse, plan to compensate users whose virtual assets are locked in?
January 03, 2023
8 MINS READCrypto lender and exchange Vauld froze all activity on its platform last July as it became ensnared in the doom loop of virtual tokens, particularly TerraUSD that collapsed. Six months and a bankruptcy filing later, the company is at another sensitive point, which could determine how its hard-luck users (creditors) recover their money.
Vauld is racing against the clock to identify a way to compensate them. The options are limited and unlikely to repair 100% of the damage. Still, it must make a decision or at least move a step closer before its big day in court.
On January 17, a court in Singapore, where the company is registered, will weigh whether legal protections granted to Vauld in the aftermath should continue. A temporary moratorium shielding it from lawsuits and payment demands was first issued in August 2022 and extended in November. This gave it wiggle room to find solutions.
Selling off the business seemed like a sensible bet, and Vauld held extensive discussions with a prominent rival, Switzerland-based Nexo. These acquisition talks have since stumbled.
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