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Monday, June 17, 2024

‘Invested all my family’s lifetime savings’: Users panic as Vauld suspends crypto withdrawals

“I have 25 Bitcoin in Vauld. I have invested all my family’s lifetime savings,” John Mayer, 37, a US-based Vauld user told indianexpress.com during a conversation on a social media website. Mayer is among the many investors who are now desperately looking for relief after Vauld, a popular crypto lending platform, suspended its withdrawals and deposits.

The company blamed the volatile market conditions for this decision. With this, Vauld joins the growing list of Decentralised Finance (DeFi) companies such as Celsius network and Voyager Digital who have suspended trading, making it difficult for hundreds of thousands of investors to liquidate their crypto-assets.

According to Mayer, he had BTC as a fixed deposit. He tried to withdraw it multiple times but the app wouldn’t let him. “After reaching out to support, I was told that it was a bug and it’d be fixed soon. I asked them to manually cancel it and they said they can’t. I had 3 days left. Three days away from saving it all. I feel like the cop in the movies who retires tomorrow and gets shot on his last day,” he added. His sentiment is shared by other investors who are suddenly unable to access their funds.

“How are we supposed to buy or sell our crypto during this time if most of the exchanges are halting withdraws and deposits? Are we supposed to just put in a little money, buy some crypto and immediately transfer it to cold storage before another exchange “pauses operations” and freezes our crypto? This is starting to become ridiculous,” Mike, another Vauld user told indianexpress.com.

Vauld allowed users to earn a fixed interest on their cryptos as soon as they deposit their funds. The interest was calculated daily, and users were able to make the payout weekly. Earlier, they could withdraw their funds immediately. But the suspension of withdrawal services has created panic amongst users who have invested their savings, looking to earn quick profits.

A Vauld user on the condition of anonymity said, “I have $15,000 in Celsius and $181,000 in Vauld. I thought we will get a percentage of our coins back. But we won’t know for months what is going to happen. One thing is assured, there will be a lot of emotional pain and speculation.”

According to the company, the decision to suspend withdrawals comes after users pulled $197.7 million over the last three weeks that saw cryptocurrency prices plummeting since June 12, 2022.

Vauld said it has hired financial and legal advisers to analyse options, including a potential restructuring. It is worth noting that in July 2021, the company raised $25 million led by Peter Thiel-founded Valar Ventures along with Pantera Capital and Coinbase.

Some like Mayer are pleading with Coinbase to come to the rescue, as the exchange is one of the investors in Vauld.  “At this point all our hope is for someone to buy them out so we can get our money back. But it’s a long shot. Will Coinbase do anything,” he asked.

Meanwhile, Vauld announced that there could be a solution as Nexo, the lender in the digital finance space is eyeing to acquire the company. “I understand that a lot of our customers are nervous about your funds. We are working tirelessly to ensure your financials are protected. To that end, we’ve signed an indicative term sheet with Nexo to acquire up to 100% of Vauld,” said Darshan Bathija in a statement issued on Tuesday.

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