Vaultd, a cryptocurrency exchange based in Singapore that has been undergoing bankruptcy proceedings since August 2022, has announced that it has obtained court approval to restructure its board. This move comes as part of the company's efforts to navigate ate its rescue process with new leadership at the helm.
Darshan Bathija, co-founder of Vauld, took to X (formerly known as Twitter) on August 24 to reveal that the company's proposed scheme of arrangement has been sanctioned by a Singapore court. As per the approved plan, the current board will be replaced by a fresh set of executives, including a new CEO, a representative from the creditors, and a scheme manager.
In conjunction with these changes, Vauld has reintroduced Know Your Customer (KYC) checks for its existing customers. This requires customers to resubmit their verification documents. The decision to reinstate KYC procedures follows the freezing of customers' withdrawal options in Ju ly 2022 due to challenging market conditions and a two-week period of high withdrawal activity that resulted in losses amounting to $200 million. These issues were exacerbated by the decline in the value of major cryptocurrencies and the company's stablecoin, TerraUSD (UST), in May 2022.
Vauld initially secured a three-month moratorium in August 2022 to develop a restructuring plan. Although there were discussions of a potential acquisition by Swiss cryptocurrency lender Nexo, negotiations reached an impairment at Nexo's office in January 202 3. In the same month, a Singapore court provided further protection to Vauld's creditors, and this safeguard was extended into February. The company's debt to creditors stands at approximately $400 million, a significant portion of which belongs to individual savers.
This effort to restructure the company's leadership and operations is aimed at overcoming the challenges and setbacks it has faced over the past year, with the goal of securing its financial stability and providing resolution to its creditors.
