Vauld issues letter to its creditors, disclosing $70 million shortfall

Quick Take

  • Vauld has disclosed a shortfall of $70 million in a letter to creditors.
  • The firm has also listed multiple other plans if its deal with Nexo doesn’t go through.

After halting client withdrawals last week, troubled crypto lender Vauld has issued a letter to its creditors and disclosed an overall shortfall of around $70 million.

Sharing the letter exclusively with The Block on Monday, Vauld said it has assets worth around $330 million and liabilities worth about $400 million. But these figures might not be final because Vauld said it is currently undergoing forensic and financial audits and the disclosed numbers are to the best of its knowledge.

As for how Vauld landed up in this situation, the firm said the main contributing factors for the shortfall are mark-to-market losses on bitcoin (BTC), ether (ETH) and Polygon (MATIC) trades as well as exposure to the collapsed algorithmic stablecoin terraUSD (UST). Mark-to-market losses are losses generated through an accounting entry rather than the actual sale of a security.