VAULD Bankrupt, What Next?
“Not your keys, not your crypto,” VAULD has proven it.
Today (5th July), VAULD has stated they are facing financial issues. That's why they should suspend all trading and withdrawals.
So, here a question arises, is our money safe or not. And it is a little bit concerning at this time.
What is VAULD?
VAULD is an Indian crypto exchange registered on Singapur and incorporated in 2018. The maximum operations of VAULD are in India, although it has registered under Singapur, like other major crypto exchanges.
A total of 275 coins are listed on VAULD, though it is known for crypto lending and borrowing. You can earn 12 to 13% interest by landing crypto on this platform. SIP option has also available on this exchange where people are generating high returns.
By the way, VAULD is a very reputed platform where some big investors invested. It has risen to over $27 million on the first round of funding from Coinbase Ventures, Pantera Capital, and Valar Ventures.
It raised another $25 million, in the second round of funding, from Valar Ventures, CMT Digital, Pantera Capital, Coinbase Ventures, etc.
It has gained almost 40x customer growth after raising those funds. Its assets under management went up to $1 billion. VAULD is trying to achieve its potential reach of $5 billion (AUM) in Assets Under Management. VAULD is also trying to increase team members from 40 to 200.
$1 billion AUM, VAULD has 20% Indian users, which is not too less. And 20% of users generate 10-20% trading volumes daily.
From the above statement, you understood at least the potential of VAULD.
VAULD revenue model.
Crypto landing: people deposits their funds on VAULD to generate a higher return. And VAULD reinvests users' funds where they think they will get the highest ROI (Return on investment).
So, you can say the VAULD revenue model work on reinvesting. And that is why they are able to pay back to end-users. That means their revenue model has tied up with assets under management.
If everything is going well with VAULD, then where is the problem?
You have seen cascading effects on the market after Luna crashed. Usually, at this time, financial markets are not going well.
So, on 21st June, VAULD issued a statement we will layoffs our 30% staff and cut down marketing. Regardless of these issues, we are reducing our executive compensation because of current market conditions. And Crypto winter session has started. So we are taking these steps.
They have also said that users do not need to worry about their funds or withdrawals. Whether the market condition is volatile or not, it won't matter.
That was their statement on 21st June, but today they have published another blog post based on the current issue.
VAULD also released another statement on 16th June while people were concerned about whether VAULD has direct exposure or not with Three Arrows Capital and Celsius. At that time, they said no direct exposure to Three Arrows Capital and Celsius.
But in today's statement, of course, they have mentioned market condition is not going well after the events of Three Arrows Capital and Celsius.
Although they have mentioned market condition is not going well due to those events and TDS implementation, is there any direct exposure or not to Three Arrows Capital and Celsius; they have not mentioned it.
VAULD said that assets worth $200 million Withdrew in the last 25 days due to the current market situation. For this reason, VAULD is facing a lot of financial pressure.
And finally, they are suffering from a financial crisis. Due to this reason, they are closing trading and all other operations on VAULD with immediate effects.
But when will be normalized all those things on VAULD?
VAULD said that we are trying to restructure and resolve this situation with the financial support of India, Singapore, and other countries.
They have given a hint that we are trying to raise funds again to resolve this issue. But yet not any clarity on how they will solve this situation.
Let's hope for the best of VAULD and solve this issue ASAP. Maybe we can see VAULD will be acquired by NEXO or others crypto exchanges, which also happened with BlockFi.
So, we will have to wait and see how they resolve it and who will take steps to save this reputable exchange. Yet we will have to wait and see how it will unfold.
What you have learned from this whole incident is!
This whole instance reminds us again, whether it is a centralized platform or an exchange, "Not your keys, Not your crypto."
So, always remember, it is always better to keep your fund safe; it is better to trust yourself rather than trusting centralized parties!
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