Troubled Asian Cryptocurrency giant Vauld is seeking a legal moratorium against its defiant creditors. A moratorium is a legal authorization by a court to debtors forcing them to postpone repayment.

This moratorium would buy Vauld some more time to restructure and rearrange its business after the ongoing crypto winter decimated asset prices and negatively impacted the company’s operations.

The Wall Street Journal reported that Vauld filed the moratorium application in a court in Singapore on 8th July 2022. If the application is granted, the moratorium would give the ailing cryptocurrency exchange some more time to figure out a proper restructuring plan.

The Wall Street Journal also explained that a moratorium file in Singapore is almost the same thing as filing for Chapter 11 bankruptcy in the United States of America. However, the moratorium helps the company avoid a total shutdown as it buys some time for a restructuring process.

Vauld has announced to the public that it was applying for a moratorium on 11 July 2022 to give its management some space required to plan towards the intended restructuring that will benefit all parties involved. However, the Journal reported that Vauld had already filed for the moratorium three days before the announcement.

Vauld had earlier announced an international suspension of economic activities on their platform which included deposits, withdrawals, and trading. This announcement which took effect on 4th July 2022 was made because of the bleak market conditions.

The market downturn capped off an uncomfortable three-week stretch where customers tried to withdraw almost $198 Million of their holdings on the platform. Vauld CEO Darshan Bathija also announced during that same period that the company would be laying off up to 30% of its staff to cut costs.

Several exchanges have laid off staff due to liquidity constraints because of the harsh market downturn.

Featured image source: cryptopotato.com