Crypto lender Vauld’s creditors to receive payback soon, firm owes over $400 million

• Singapore-based crypto lending platform Vauld’s payback scheme has been approved and creditors could receive payback soon. 
• Over 90% of the creditors who participated voted in favor of the payback scheme. 
• Creditors' INR balances will likely be paid out within the next four to six weeks.

Vauld, a Singapore-based crypto lender and exchange, is in preparation to pay back INR balances to creditors by August 2023. The exchange’s payback scheme was approved by 91.85% of creditors and the platform is likely to start paying creditors back soon.

The lender proposed paying creditors back in excess of 100%, offering a better outcome than liquidation.

Also read: Deutsche Bank applies for crypto custody license

How Vauld ended up with $400 million debt to creditors

The crypto lender backed by several noteworthy investors including Peter Thiel’s Valar Ventures, Pantera Capital and Coinbase Ventures halted operations on July 4, 2022.

The exchange cited financial difficulties and volatile market conditions when faced with mass withdrawals by users. Vauld then filed for protection against creditors and lawsuits in a Singapore court, and came up with a restructuring plan to pay back its debt. 

Vauld offers different payback tracks to creditors, prepares for INR returns

In its detailed restructuring plan’s Q&A section, the lender explains that creditors with INR balances are creditors of Flipvolt and not Vauld. These creditors are not bound by the payback scheme. However, the exchange proposed that INR balances be paid out in full, using Flipvolt’s assets. 

In its Telegram community, Vauld’s representatives have acknowledged that INR creditors will receive their funds within the next four to six weeks. The Q&A document also states that creditors with INR balances will have the option to invest, as new money, in the DeFi strategies offered by Vauld’s “New Business.” 

Crypto Hanuman, a crypto influencer and Vauld community member, reported that the Singapore-based firm has plans to restart its operations with a DeFi yield-generating platform under new management. This plan is pending a sanction from the Singapore court and this is likely the DeFi strategy where INR creditors could reinvest their funds.

Results from Vauld’s invitation to creditors for a vote on payback scheme

According to the official announcement by Vauld’s representatives on the Telegram group, the lender conducted a vote between May 31 and June 8, where 6,721 valid votes were cast. These votes represented creditors owed $253.13 million in approved claims and the payback scheme proposed by the exchange was approved by a large majority (91.85% voters by count).

The details of the scheme can be found here.

Payback for other creditors of Vauld

According to the source, 91.85% of Vauld’s creditors participated in the voting process and favored the proposed plan to return funds. Vauld has explained that DeFi payment creditors are likely to recover 38% to 49% of their claims. A 100% recovery is not likely under any circumstances.

Vauld told FXStreet that once the scheme is approved by the Singapore Court, the repayment process will begin. Further, the exchange’s representative confirmed that an approval on the payback scheme would imply creditors will receive their INR back by August 2023.