Vauld, a cryptocurrency lender that is backed by exchange platform Coinbase (COIN), has halted all withdrawals from its accounts and said it is pursing a restructuring.
Vauld is the latest in a series of cryptocurrency lenders to announce that it is freezing client accounts, following similar moves by Celsius Network and Babel Finance. The lenders say they are facing a liquidity crisis due to the current downturn in the global cryptocurrency market.
Singapore-based Vauld said it has hired several legal advisers to help it explore a potential restructuring amid the current rout in the prices for digital coins and tokens.
Vauld added that all withdrawals, trading, and deposits on the platform have been suspended until further notice. The lender’s decision to freeze its accounts comes weeks after the company said it was processing withdrawals “as usual and this will continue to be the case in the future.”
The about-face hints at the speed with which plunging prices are rippling through the cryptocurrency sector, pushing hedge fund Three Arrows Capital into liquidation last week.
Bitcoin (BTC), the largest cryptocurrency, is currently trading at $19,600 U.S. after falling below the key support level of $20,000 U.S. late last week. Ethereum (ETH) is now trading around $1,000 U.S, down from a peak of more than $3,000 U.S. last November.
Founded in 2018, Vauld provides cryptocurrency lending and deposit products. It raised $25 million U.S. in a Series A funding round led by investor Peter Thiel’s Valar Ventures last year. Coinbase also participated in the financing.
Vauld said in a blog post over the weekend that it has seen nearly $200 million U.S. of customer withdrawals since June 12 as market conditions deteriorated, prompting the account freeze.
However, Vauld did say that it will make “specific arrangements” for deposits by customers who need to meet margin calls related to collateralized loans, according to a written statement from the company.
