Singaporean cryptocurrency exchange Vauld, which declared bankruptcy last year, plans to reconfigure its board by introducing a new CEO, a creditor representative, and a scheme manager. The platform’s current CEO and co-founder statement means that these new appointees will supervise the bailout.
Vauld halted its operations in 2022, proceeding to file for bankruptcy in Singapore.
Vauld Leadership Transition
The lending platform is undergoing bankruptcy proceedings in Singapore due to financial challenges. And now Vauld received court approval for a new organizational scheme.
Vauld CEO and co-founder Darshan Bathija stated in a tweet, “Vauld (Defi Payments Pte Ltd) got its scheme of arrangement passed in Singapore courts. As part of the scheme, the current board will be replaced with a new CEO, a creditor representative, and a scheme manager.”
Bathija also mentioned that customers are updating their KYC details. This statement comes nearly a year after Vauld faced scrutiny under a money laundering investigation. In August 2022, Indian authorities froze assets valued at $46.4 million from its domestic operations due to money laundering suspicions.
Read more: 13 Best No KYC Crypto Exchanges in 2023
In February, the Singapore High Court allowed Vauld until March 24, 2023, to formulate a plan for repaying its creditors. This was crucial after a potential acquisition deal with Nexo collapsed.
However, Vauld was unable to secure an extension for a longer timeline. There were subsequent discussions in the community about Vauld potentially needing to meet all creditor obligations within less than two months.
Singapore Clarifies Rules
The court even established a committee of creditors (CoC) to facilitate the settlement of the outstanding amount. This move was prompted after a faction of creditors filed a complaint against Vauld, accusing it of hindering communication and taking unwanted corrective measures. Vauld owes more than $2.2 million to these creditors.
Bathija noted that he will update more information soon.
Vauld’s financial instability can be traced back to several incidents, the biggest of which was the downfall of Terra. Other problems include economic issues with the Celsius Network and Three Arrows Capital defaulting on its loans. These were the primary factors behind Vauld’s suspension the previous year. The fallout posed a challenge for Singapore, a nation that identifies itself as a cryptocurrency stronghold.
Nevertheless, Singapore has established a more rigorous regulatory environment for cryptocurrencies, balancing control with promoting innovation. Singapore’s financial regulator recently set down regulations for stablecoins, positioning itself among the first global jurisdictions.
The Monetary Authority of Singapore (MAS) framework includes requirements on low-risk stablecoin reserves, a five-day redemption timeline, and disclosure needs for issuers.