A cryptocurrency lender backed by Peter Thiel and Coinbase suspended withdrawals, trading and deposits on its platform, citing volatile market conditions and financial difficulties facing key business partners.
The platform, Vauld, said on 4 July that it froze operations after users pulled almost $200m over the last three weeks. A sharp decline in cryptocurrency prices that began with the collapse of two cryptocurrencies in May has spooked traders and caused knock-on effects in the digital asset world.
Crypto broker Voyager Digital temporarily suspended trading, deposits, withdrawals and loyalty rewards on 1 July. Major crypto lender Celsius has paused withdrawals and has tapped advisers to prepare for a possible bankruptcy, The Wall Street Journal previously reported. Crypto hedge fund Three Arrows has been ordered to liquidate.
Singapore-based Vauld said it has engaged financial and legal advisers to explore and analyse all possible options, including potential restructuring. In June, Vauld said it would lay off 30% of its staff, slow down hiring and halve executive compensation.
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“We are confident that, with the advice of our financial and legal advisers, we will be able to reach a solution that will best protect the interests of Vauld’s customers and stakeholders,” Vauld chief executive Darshan Bathija said.
Vauld raised $25m in Series A funding last summer, attracting funds from Valar Ventures, which was founded by Thiel, as well as Pantera Capital and Coinbase Ventures, a unit of the publicly listed US crypto exchange.
Spokespeople for Thiel and Pantera Capital didn’t immediately respond to requests for comment. A spokeswoman for Coinbase declined to comment.
Bitcoin, the world’s largest cryptocurrency by market value, traded below $20,000 on 4 July. At its peak in November, bitcoin was worth more than $60,000.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
This article was published by The Wall Street Journal, part of Dow Jones