• Tue. Aug 2nd, 2022

Contagion Spreads Through Digital Currency Markets As Vauld Suspends Withdrawals

ByHazel R. Lang

Jul 5, 2022

Over the past few weeks, the digital currency industry has imploded as hedge funds, lenders and exchanges go bankrupt in the face of cascading liquidations, margin calls and the equivalent of bank runs.

As things appeared to calm down, Vauld, a Coinbase-backed lender (NASDAQ: COIN), suspended withdrawals and hired advisers to explore restructuring.

Vauld joins Celsius, Voyager and others in liquidity crunch

Just a few weeks ago, amidst the most chaotic stage of the recent market slump, Vauld posted an update on social media to reassure its users that all was well.

It’s an all-too-familiar script at this point. Just hours before Celsius suspended withdrawals, CEO Alex Mashinsky took to social media to denounce ‘FUD and misinformation’ about the company, asking if users could point out just one time when the company had declined. a withdrawal.

It seems Vauld learned from the Celsius playbook. Less than three weeks later, he made the same decision as Celsius, bringing in Singapore’s top lawyers and financial advisers to determine his next move while holding client funds hostage.

Did Vauld lie in his reassuring Tweet, or are things getting worse day by day behind the scenes as major digital currency hedge funds like Three Arrows Capital hit the proverbial wall? Only Vauld CEO Darshan Bathija and his entourage know the answer to that question.

The dominoes keep falling – will it stop with Vauld?

Over the past few weeks, we’ve seen some of the biggest names in the digital currency industry brought to their knees by rapidly falling prices and the ensuing tsunami of liquidations. Celsius, Babel Finance and Voyager Digital all found themselves in hot water when Three Arrows Capital founders Su Zhu and Kyle Davies took shelter as their over-indebted empire implodes around them.

Will it end with Vauld? No one can say for sure, but Sherlock Holmes shouldn’t understand that things aren’t going well in the digital currency space, and John Watson shouldn’t logically infer that you can’t believe a word. in the said space. If everything was literally on the verge of total collapse, smooth talkers like Alex Mashinsky would be there to reassure us that everything was fine and that no one should panic.

Incompetence, lies and deception at the heart of ‘crypto’

What all of this has shown is that people at the highest levels of the digital currency space are a frightening combination of incompetent and downright dishonest. Prodigies like Do Kwon and Su Zhu have proven to be overconfident gamers, and those running rigs like Celsius and Vauld have proven that what they say on any given day is likely to contradict the facts shortly. after.

In short, no one has a clue what’s going on, and everything is happening faster than expected. In keeping with the saying “no honor among thieves”, all the pirates turn on each other in an attempt to grab what treasure they can and flee the sinking ship.

Celsius, Babel, Voyager and Vauld are just the names we know, but as Sam Bankman-Fried recently confessed to Forbes, many others in space are “secretly insolvent”. What he knows is a guess, but sooner or later we’re all going to find out.

Follow The CoinGeek Crypto Crime Cartel series, which dives into the flow of groups of BitMEX at Binance, bitcoin.com, Blockstream, Metamorphose, Coinbase, Ripple,
Ethereum, FTX and Attached—who co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) market players.

New to Bitcoin? Discover CoinGeek bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.

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