Crypto Lender Vauld Suspends Withdrawals as Customers Yanked $200M

Crypto lender Vauld, which is backed by both Coinbase and investor Peter Thiel, has suspended withdrawals, citing the crisis on the digital asset market, the Financial Times reported Monday (July 4).

Vauld had previously offered clients annualized returns of up to 40% to lend out their crypto tokens. On Monday, it said clients had pulled nearly $200 million from the Vauld platform, and with recent weeks’ high-profile failures, the company said that it was looking at several options — including restructuring.

However, Vauld is not the only company that has been hit by a wave of consequences from the floundering market and falling status of digital token lending.

Several companies have been feeling the effects since the Luna coin collapsed in May, and other companies, like BlockFi, Celsius and others, have also taken the path of shutting down withdrawals. Meanwhile, crypto hedge fund Three Arrows Capital has failed and shut down with other parties.

Vauld said recently it didn’t have any exposure to Celsius or Three Arrows, and said it was “liquid despite market conditions.”

That said, the company admitted it has been “facing challenges” due to what it said was a combination of things, including “volatile market conditions, the financial difficulties of our key business partners inevitably affecting us and the current market climate.”

This comes as FTX founder Sam Bankman-Fried, who has been called a “a lender of last resort” in the current crypto sector, recently said he wants to look into buying some beaten-up crypto mining companies.

Read more: Report: FTX Founder Sam Bankman-Fried Considers Miner Acquisitions

Bankman-Fried said there could be an opportunity for a “really compelling” opportunity for the industry, as many mining companies “do play a little bit of role in the possible contagion spread, to the extent that there are miners that were collateralizing borrows with their mining rigs.”