Vauld Disagrees With the Asset Freeze Order by India’s Enforcement Directorate
- Vauld is seeking legal counsel on the best way to access its frozen assets.
- In its defense, Vauld admitted that it received a summons from the ED to provide specific documents and submitted the requested records.
On Saturday, an official statement from struggling Asian crypto lender, Vauld, says the company doesn’t agree with the grounds on which India’s enforcement directorate (ED) froze its account recently. As widely reported, India’s ED froze $46 million (3.7 billion Rupees) worth of the crypto lending firm’s assets.
The financial regulator claimed that ED froze Vauld’s assets because the company is linked with the investigation regarding a money laundering case. According to the ED, yellow tune technologies (an Indian firm) is linked with a massive money laundering case. More importantly, the ED discovered that yellow-tune technologies were one of Vauld’s clients.
In its defense, Vauld admitted that it received a summons from the ED to provide specific documents and submitted the requested records. The crypto lender added that the account that led to the freeze order belonged to one of its ex-customer, and the platform has deactivated the account.
However, Vauld didn’t disclose the reasons for deactivating the account. The crypto lender expressed its disappointment at the actions of the ED. The company said it had always been strict with its customer identification protocols. According to the announcement, Vauld has enlisted the services of legal experts to determine the next best steps to protect the interests of the company’s stakeholders and customers.
The company added that it fully cooperates with the ED and will continue to do so until the agency completes its investigation. The Vauld announcement further states that the company would do everything possible to make its platform a safe and secure place for crypto transactions. Vauld is one of ten crypto-related firms under investigation by the ED following the China loan app scam. Before Vauld, the ED froze assets belonging to India’s number one crypto exchange, WazirX.
Vauld only a Tip of the Iceberg
Vauld is among the list of crypto lenders suffering from liquidity issues. The company’s insolvency problems started with the crash of the terra network (including its terra stablecoin) and the general downturn in the crypto market. The crypto lender paused customer withdrawals last month and is indebted to its creditors.
Per multiple reports, Vauld owes $402 million to several creditors. However, 90 percent of this amount is deposited from individual retail investors. Earlier this month, a Singapore high court granted the embattled crypto lender a 3-month moratorium to solve its financial woes. Vauld has yet to implement the restructuring plan it outlined on July 4 after suspending customer withdrawals.
Nevertheless, a bailout offer might be on the horizon for Vauld. The Crypto platform, Nexo, is performing its due diligence on the crypto lender. Nexo will conclude its research by September 5. It started the research on July 5. Then, the platform will decide whether to bail out the crypto lender.
However, there is still hope for Vauld even if Nexo decides against a bailout offer. The crypto lender believes it can raise more venture capital, convert debt to equity, create a payment plan linked with future revenue and launch its governance token to solve its financial problems.