As the management of Vauld is trying to figure out a solution to the ongoing crisis, several users are anxious. The individual investors are doubtful as to what it could mean to them in future.
Vauld User Funds: What Is The Priority
Meanwhile, it appears that user funds could be prioritized above venture capitalists, if the company goes for liquidation process. When the company’s audit begins by calculating assets and liabilities, Vauld could then start to return the liabilities.
On Mondy, Vauld said in an announcement that it is facing financial challenges owing to the volatility in the market. This is due to a combination of circumstances such as the volatile market conditions and the financial difficulties of our key business partners. Also, the current market climate led to a significant amount of customer withdrawals, it stated.
The withdrawals amounted to excess of $197.7 million since 12 June 2022 when the decline of the cryptocurrency market was triggered by Terra crash. Following this was further damage due to Celsius network pausing withdrawals, and Three Arrows Capital defaulting on their loans.
What’s Next For Users?
Other factors like India’s high taxation which became effective starting this month have also caused more damage to Vauld’s prospects recently. Other Indian exchanges are also facing the heat amid concerns of Vauld user funds. Already, trading volumes in the country’s exchanges have come down drastically.
The individual users, however will be followed by secured and preferred creditors of Vauld, as per standard liquidation practices. The customers come under the category of unsecured creditors. After paying off outstanding liabilities to the secured and preferred creditors, the unsecured creditors will be preferred.
The news of Vauld suspending withdrawals, trading and deposits on its platform came as a shocker to the crypto ecosystem. This resulted in increased voices to protect individual funds from the crypto exchanges, where the assets are unsecured.
Since the announcement, there was no further update on the situation from Vauld management. The management said it would provide any update on material developments “at the appropriate juncture.” We seek your understanding and patience in the meantime, it added.
The post Vauld User Funds: What Next If Exchange Gets Liquidated? appeared first on CoinGape.
Don't forget to share your review/suggestions for the android app.
All In One Crypto App is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by All In One Crypto App or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risks