Vauld discloses shortfall of $70 million in letter to creditors

According to the letter – a copy of which ET has reviewed – Vauld said it had assets worth $330 million and liabilities of nearly $400 million at the group level.

“We also have a mismatch of tenure where we have committed a significant proportion of our assets under management (AUM) towards loans with a tenure of another 3-11 months that can’t be recalled early,” the company’s cofounder Darshan Bathija said in the letter.

Vauld said the mismatch between assets and liabilities was due to mark-to-market losses on Bitcoin, Ethereum, and Matic trades, and exposure to Terra USD (UST). According to Investopedia, Mark-to-market is an accounting practice that involves adjusting the value of an asset to reflect its value as determined by current market conditions.

Last week,
Vauld suspended its deposits and withdrawals operations amid broader volatility in the cryptocurrency market and as the platform was facing financial challenges. It had recorded customer withdrawals of over $197.7 million since June 12.

Vauld’s Singapore entity Defi Payments Pte Ltd filed for a moratorium in Singapore on July 8 to restructure its strategy. Vauld is also undergoing the due diligence process as London-based
Nexo eyes a 100% acquisition.

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Bathija said he is optimistic the Nexo acquisition will happen. However, if it does not, the Singapore-headquartered lender has other plans, including raising more venture capital, exploring alternatives to complete an acquisition, issuing their own token, and developing a payment plan tied to future revenue.