Economists in cryptocurrency predicted that the crash in crypto would end soon and only the strong will remain in crypto. Many people thought this was a joke, but every week, another company or token dies due to financial challenges caused by the crash. Moreover, coins are the most affected. Considering how many exist, some are unknown, so companies offering cryptocurrency services are suffering. Vauld is the most recent victim on the list, which might negatively impact cryptocurrency.
It’s July, reports from the second quarter are out, and people can see how companies and markets have performed. The reports identified this as the worst quarterly performance in the cryptocurrency market since 2011. In the second quarter, billions of dollars were wiped out of the market because tokens lost value at a high rate. The crypto crash has exposed flaws that people had not recognised earlier and poor business models.
Some consequences of the crash
- This is the reason why Terra Luna, a stablecoin, collapsed.
- Three Arrows, a crypto hedge fund, was liquidated after it could not pay the $660 million loan it acquired from Voyager Digital.
- Celsius paused withdrawals from their platform due to increased withdrawals, as many investors preferred dollars to hold their cryptocurrency portfolio.
Vauld
Another company that has done this is Vauld. Vauld is a cryptocurrency platform where people can hold cryptocurrency, buy and sell it and convert it to dollars. But this all changed on the 4th of July 2022, when the company paused withdrawals and deposits. This means people cannot withdraw their tokens from the platform until further communication. Three weeks later, the CEO, Darshan Bathija, was quoted in a blog saying, “withdrawals continue as normal despite the cryptocurrency crash.”
When asked why the company paused its services, the CEO blamed the volatile market. The volatile market has made many investors lose faith in cryptocurrency. According to their reports, investors and users that used Vauld have withdrawn over $197.7 million since the 12th of June. This is similar to what happened to Celsius and led to the company pausing withdrawals. Another reason for pausing their services is that the company’s business partners faced financial issues. Vauld suffered a huge blow due to the challenges their partners were facing. This made it impossible for them to finance all the investors’ withdrawals. CEO Darshan Bathija said they are working with their financial and legal teams and advisors to solve the problem. Their main interest is to protect their stakeholders from any negative financial impact.
