Startup Deep Dive : Vauld — $197.7 million walked out in three weeks after a “business as usual” promise

In the three weeks to 4 July 2022, customers pulled $197.7 million out of Vauld. Eighteen days before the freeze, its chief executive had told them the platform would “continue to operate as usual” and that “all withdrawals were processed as usual and this will continue to be the case”. By the morning of 4 July, the company’s own restructuring FAQ later admitted, its liquid assets were below $30 million against liabilities that an affidavit put at $402 million.

Vauld was the Indian-built crypto “bank” that paid up to 12.68% a year on stablecoin deposits, counted Peter Thiel’s Valar Ventures, Pantera Capital and Coinbase Ventures as backers, and had a chief executive telling BusinessLine in May 2022 that assets under management had touched $1 billion and would be $5 billion within the year. Two months later it was in the Singapore High Court asking for protection from its own depositors. What follows is the record: how the money came in, where it went, what the Enforcement Directorate froze, why the Nexo rescue failed, and what the roughly 150,000 creditors have actually received four years on.

Quick facts

What Vauld did

Vauld took crypto deposits from retail users, paid them interest, and lent or deployed those coins elsewhere for a higher return. At the time of the July 2022 freeze it advertised 12.68% annual yield on stablecoins such as USDC and BUSD and 6.7% on Bitcoin and Ether, per TechCrunch, and let users borrow against their holdings at up to a 66.67% loan-to-value ratio. It also ran a trading venue with Binance as exchange partner and BitGo as custodian (company statement, July 2021), sold SIP-style “automatic investment plans” pitched at Indian savers, and charged no deposit or withdrawal fees. The customer was overwhelmingly retail: an affidavit filed in the Singapore High Court in July 2022 put 90% of what Vauld owed down to individual depositors.

The origin

Darshan Bathija and Sanju Sony Kurian started the company in Bengaluru in 2018 under the name Bank of Hodlers. The premise was borrowed from the last crypto winter: people who intended to hold Bitcoin through the crash should be able to borrow rupees or dollars against it instead of selling. Bathija, then in his mid-twenties, came from what the company’s own press material calls “a family background of 4 generations of financiers”; he had worked at Piramal Capital and as head of partnerships at TapChief. Kurian, an M.Tech in computer engineering, had built engineering teams at an education-technology firm before the two met in Bengaluru. Forbes Asia put both on its 30 Under 30 list in June 2022, at ages 28 and 29, weeks before the platform failed.

The lending-only model widened fast. In June 2020 the company raised $500,000 from LuneX Ventures and angels; by December 2020 it had rebranded to Vauld and closed a $2 million round led by Pantera Capital with Coinbase Ventures, LuneX and Compound founder Robert Leshner, telling CoinDesk it had grown “950%” since the June cheque and would become a “full crypto bank” with trading, cards and an OTC desk. Three Arrows Capital was also an early seed investor, a fact Bathija disclosed on Twitter on 23 June 2022, adding that the fund had exited in December 2021.

The struggle years

Vauld’s setbacks were compressed into 2021 and 2022, and the company later disclosed most of them itself in court and in creditor FAQs.

The first was operational. In August 2021, a software bug cost the company about $4.5 million, according to the affidavit Bathija filed in Singapore and reported by The Block. The company also carried roughly $6 million of sponsorship commitments to the Alfa Romeo Formula 1 team and Crystal Palace football club, spending that made sense at $1 billion of AUM and none at $30 million of liquidity.

The second was a bet on Terra. Vauld had staked what its 31 July 2022 restructuring FAQ called “a significant amount in UST of an estimated ~US$28m”. When UST lost its dollar peg on 9 May 2022, that capital was largely gone. The same FAQ says the company was also sitting on long positions in Bitcoin, Ether, Matic and XRP worth about $37 million by July, positions that fell with the market as Bitcoin slid from $30,297 on 9 May to $20,231 on 4 July, a 33.2% drop.

The third was India’s tax regime. A 30% tax on crypto gains took effect on 1 April 2022; Inc42 reported that domestic trading volumes fell sharply under the new regime, and BusinessToday noted that Vauld’s marketing had leaned on personal-finance influencers to recruit Indian savers. Former employees told Inc42 that the company kept hiring aggressively through May 2022 and that 75% of its users were Indian but represented only about 10% of assets under management, a mismatch between where the marketing money went and where the deposits came from.

By mid-June the run had started. Celsius paused withdrawals on 12 June 2022; Vauld’s FAQ records net withdrawals of about $56 million the following day and $1 million to $8 million a day thereafter. On 16 June, Bathija emailed customers that Vauld remained liquid and would “continue to operate as usual”. On 17 June, per Inc42, the company cut about 30% of a roughly 97-person team, mostly in marketing and talent acquisition, halved executive pay and paused vendor contracts. By 28 June liquid assets were $28.5 million.

The turning point

The turning point was 4 July 2022, and the numbers on either side of it are stark. On one side: a company that had told BusinessLine in May 2022 it held $1 billion in assets under management, that had raised about $27 million in venture capital, and that only five weeks earlier had itself written a $4.7 million cheque into a seed round for the custody start-up Liminal (CB Insights, May 2022). On the other: a statement, issued the morning of 4 July, that “withdrawals in excess of $197.7 million since 12 June 2022” had forced it to suspend “all withdrawals, trading and deposits on the Vauld platform with immediate effect”, and to hire Kroll as financial adviser and Cyril Amarchand Mangaldas and Rajah & Tann Singapore as lawyers.

Four days later, on 8 July, Defi Payments applied to the Singapore High Court for a six-month moratorium under section 64 of the Insolvency, Restructuring and Dissolution Act 2018. The affidavit that went with it, reported by The Block, is the most detailed public account of Vauld’s balance sheet:

• Total owed to creditors: $402 million; $363 million, or 90%, to retail depositors (affidavit, 8 July 2022).
• Assets listed in the affidavit: $287.7 million, mainly Bitcoin, Ether and XRP; Bathija told creditors the true figure was about $330 million once bank balances were included, implying a hole of roughly $70 million.
• Top 20 unsecured creditors: $125 million between them; the single largest was owed $34 million and three were owed over $10 million each.
• Secured creditors: an unnamed “Counterparty 1” owed $35 million and FTX Trading owed $4.1 million.
• Defaulted loans: about 85 BTC, then worth roughly $1.7 million, “with little to no hope of recovery”.

The court granted the moratorium on 1 August 2022, initially to 7 November, after a company poll in which 2,280 of 2,910 responding creditors, or 78.3%, backed it (Vauld FAQ, July 2022). The platform has not taken a deposit or executed a trade since.

The money behind it

Vauld raised very little equity for a business that was holding hundreds of millions of dollars of other people’s coins. That is the funding shape to understand: about $27 million of shareholder capital against $402 million of customer liabilities, a ratio a regulated bank would never be allowed to run.

• June 2020: $500,000 seed from LuneX Ventures and angel investors (CoinDesk, December 2020).
• December 2020: $2 million led by Pantera Capital, with Coinbase Ventures, LuneX and Robert Leshner; Pantera’s Paul Veradittakit backed the “crypto as the preferred instrument of banking” pitch (CoinDesk, December 2020).
• July 2021: $25 million Series A led by Valar Ventures, with Pantera, Coinbase Ventures, CMT Digital, Gumi Cryptos, Cadenza Capital and Leshner; Valar’s Andrew McCormack joined the board; company-stated total raised of $27 million (CoinDesk and TechNode Global, July 2021).
• Total funding: about $27 million over four rounds from 13 investors (CB Insights). No valuation was ever disclosed.

What each backer changed: Pantera gave the Bank of Hodlers rebrand its first institutional stamp; Coinbase Ventures’ name became the shorthand every 2022 headline used (“Coinbase-backed Vauld”); Valar’s cheque funded the licensing push into Singapore, the UK and Wyoming, the sponsorships and a hiring plan of “at least a hundred new roles” announced with the round. None of the three put fresh money in after July 2022, and none has been reported as a party to the restructuring.

How it made money

Vauld’s revenue was a spread business dressed as a bank, and the part people get wrong is that it was never brokerage. There were no deposit or withdrawal fees and trading was a thin layer on top of Binance liquidity. The money came from the gap between what Vauld paid depositors and what it earned deploying their coins.

• Money in: retail deposits earning up to 12.68% on stablecoins and 6.7% on Bitcoin and Ether (TechCrunch, July 2022); average deposit per customer of about $20,000, per the company’s June 2022 press release.
• Money out, route one: over-collateralised loans back to retail at up to 66.67% LTV, where the borrower’s interest exceeded the deposit rate.
• Money out, route two: lending to institutions. The company said it lent to Three Arrows Capital but closed those positions around September 2021 (restructuring FAQ, July 2022); by late 2022 the biggest single receivable was a loan to Amber Group of roughly $130 million due in June 2023, according to Protos citing Vauld’s 25 November 2022 affidavit, and The Block separately described “substantial loan receivables from Amber Group”.
• Money out, route three: yield farming and directional positions on the company’s own book, including the roughly $28 million staked in UST and about $37 million of long crypto positions (restructuring FAQ, July 2022).
• Costs: a team of about 97 before the June 2022 cuts, sponsorship obligations of about $6 million, influencer marketing, and advisers once the restructuring began.

The margin sat in routes two and three. That is what made a 12.68% promise possible in a world where dollar deposits paid under 1%, and it is also why the business could not survive a run: the assets were in loans and positions that could not be liquidated in a day, and the liabilities were withdrawable in minutes.

The numbers

No audited profit-and-loss statement for Defi Payments has been made public, and the Indian entity’s filings are only summarised on paid databases, so this piece does not present a revenue series. What the record does give, with unusual precision, is the balance sheet of the collapse and what has since been paid back. Figures are in US dollars because that is the currency of the court filings; the one rupee figure is the ED attachment.

Two things stand out. First, approved claims fell from $402 million owed in July 2022 to $325 million under the scheme, largely because Indian rupee balances sat with Flipvolt and were carved out of the Singapore process and, per FXStreet, were to be repaid in full from Flipvolt’s own assets. Second, the recovery forecast of “up to 93%” depended on illiquid assets, above all the Amber Group receivable, the FTX claim and deposits at the Estonian lender CoinLoan, which Protos reported at “tens of millions of dollars” before CoinLoan itself stopped operating on 25 April 2023.

Where the money came from

Vauld’s user base and its money lived in different places, and that gap explains both the marketing and the collapse.

• Users by geography: about 75% Indian, per former employees quoted by Inc42 in July 2022; India also supplied 91% of the creditors’ committee by number (Vauld Q&A, November 2022).
• Assets by geography: those Indian users held only about 10% of AUM (Inc42, July 2022). The large balances, including the top 20 unsecured creditors owed $125 million, were foreign, with enough US customers that Nexo’s December 2022 exit from America became a deal-breaker.
• Scale of the base: company-stated “150,000+” users across 190 countries in June 2022; 147,000 creditors contacted for the moratorium poll in July 2022; “approximately 150,000” retail creditors under the scheme (Kroll, September 2023). Inc42 and BusinessToday reported a larger figure of 800,000 investors, which appears to describe registered accounts rather than funded ones.
• Assets by type at the freeze: Bitcoin, Ether and XRP made up most of the $287.7 million listed in the affidavit; the Indian entity separately held ₹164.4 crore in bank and payment-gateway balances and ₹203.26 crore in crypto when the ED froze them.

The surprise is the rupee book. The ED alleged that 23 lending-app entities routed ₹370 crore through a Bengaluru shell company, Yellow Tune Technologies, which held an account on Flipvolt and converted the money into crypto sent to foreign wallets. Vauld said it was “unfortunate that, despite extending our cooperation, the Enforcement Directorate has proceeded to pass a freezing order”. Whatever the merits, the attachment locked up assets Vauld had earmarked to repay Indian depositors, and it is still not final: Flipvolt’s appeal, FPA-PMLA No. 5836/DLI/2023, was pending when the Telangana High Court on 31 March 2026 directed the tribunal to decide it within 45 days, per a July 2026 report by Oquilia.

The risks

Vauld is no longer an operating business, so the risks that matter are the ones sitting between creditors and their remaining money.

• Regulatory shutdown of the payout rails. On 6 June 2025 the Monetary Authority of Singapore clarified that its Digital Token Service Provider regime under the Financial Services and Markets Act 2022 would apply from 30 June 2025 with no transition period. Defi Payments, which has no licence, suspended token withdrawals “indefinitely” from that date and wrote to MAS arguing that processing creditor withdrawals with “no revenue or profit being booked” is not “carrying on a business” (Vauld notice, 14 July 2025). The Scheme Manager then had to apply to the High Court (HC/OC 1164/2025, heard 4 December 2025) for an alternative distribution method, and the second distribution of January 2026 is being routed through Crypto.com accounts, with creditors in unsupported jurisdictions such as New York State waiting on a manual workaround. Every step adds months and counterparties.
• Illiquid-asset recovery risk. The gap between the 36% first distribution and the “up to 93%” ceiling is filled by receivables: the Amber Group loan, the FTX bankruptcy claim and the CoinLoan deposits. The company’s May 2025 quarterly update still listed all three as sources of future recovery and projected further distributions in the second or third quarter of 2025; the actual second distribution landed in January 2026. Each of those counterparties has been through its own insolvency or restructuring, and timing is outside Vauld’s control.
• Governance and cost risk. The scheme runs 36 months from 16 August 2023 and can be extended. Creditors have complained publicly about the process: four creditors owed $2.23 million filed an affidavit in February 2023 accusing management of having “squandered this time chasing avenues that creditors did not wish to pursue” and of “shutting down/censoring creditor communication channels” (Inc42), and in September 2024 Vauld creditors told CryptoTimes that professional fees were consuming recoveries without transparency. Every month of adviser time is paid from the same pool the creditors are waiting on.
• The India attachment. ₹367.67 crore remains under a contested PMLA order nearly four years on. Vauld told creditors in November 2022 it expected the assets to be “made fully available to Flipvolt in approximately one year”. They were not, and the tribunal’s decision was still awaited in mid-2026.

The takeaway

The lesson from Vauld is not “crypto is risky”. It is that a yield is a liability with a maturity, and whoever pays it must know where the matching asset is and how fast it can be sold. Vauld promised 12.68% on money that could leave in minutes and earned it on a $130 million loan to one counterparty, a $28 million stake in an algorithmic stablecoin, $37 million of long positions and a sponsorship deal with a Formula 1 team. The day after Celsius paused withdrawals on 12 June 2022, $56 million walked out of Vauld and nothing on the asset side could move at that speed. The founders were not accused of theft; the Singapore court, the creditors’ vote and even the ED’s order all treat this as a liquidity and control failure, not a fraud. That is what makes it transferable. Any Indian founder building a savings product, in rupees or in tokens, should be able to answer a single question before the first depositor arrives: on the worst day, what fraction of my liabilities can I pay out by close of business? Vauld’s answer, on 4 July 2022, was under 7.5%.

Frequently asked questions

Why did Vauld freeze withdrawals in July 2022?

Because it ran out of liquid assets. Customers withdrew $197.7 million between 12 June and 4 July 2022 after the Terra collapse and Celsius’s withdrawal pause, and the company’s own FAQ says liquid assets had fallen below $30 million by 4 July while total liabilities were $402 million. It suspended withdrawals, trading and deposits and hired Kroll to restructure.

How much did Vauld owe and to whom?

The 8 July 2022 affidavit filed in the Singapore High Court listed $402 million owed to creditors, of which $363 million, or 90%, was retail deposits. Under the scheme sanctioned in August 2023, approved unsecured claims totalled about $325 million held by roughly 150,000 creditors, per Kroll.

What happened to the Nexo acquisition?

Nexo signed an indicative term sheet in July 2022 with a 60-day exclusivity that was extended twice. On 26 December 2022 Bathija told creditors the talks had “not come to fruition”, citing Nexo’s failure to answer due-diligence questions about its own solvency, its announced exit from the United States, and a proposal that offered creditors no early exit through a reverse Dutch auction.

What have Vauld creditors received so far?

The scheme, effective 16 August 2023, forecast a first distribution of 36% by October 2023 and total recoveries of up to 93%, all paid in crypto, per Kroll. A second distribution of $82.3 million in tokens, equal to 25% for Pro-Rated Track creditors and 29% for Variable Recoveries Track creditors, was announced on 29 January 2026 and is being paid through Crypto.com because Vauld’s own withdrawals have been suspended since 30 June 2025 under Singapore’s new licensing regime.

Why did the Enforcement Directorate freeze Vauld’s Indian assets?

On 12 August 2022 the ED froze ₹367.67 crore held by Flipvolt Technologies, Vauld’s Indian entity, alleging that a shell company called Yellow Tune Technologies used its Flipvolt account to convert ₹370 crore from 23 predatory lending apps into crypto sent abroad, and that Flipvolt’s KYC and anti-money-laundering checks were lax. Vauld disputed the order; the appeal was still pending before the PMLA Appellate Tribunal in 2026.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• The Block, “Crypto lender Vauld owes $363 million to retail investors after halting withdrawals” (affidavit figures), July 2022
• The Block, “Nexo terminates potential deal with troubled crypto lender Vauld”, December 2022
• Vauld Help Center, Corporate Statements of 4 July and 11 July 2022; “FAQs on Vauld Group Restructuring” as of 31 July 2022; Nexo update of 6 September 2022; Creditors Committee updates of 20 October 2022; Q&A pre-supplementary affidavit of 25 November 2022
• Vauld Help Center, Notice of Scheme Meeting (April 2023); Track Election and One-Time Conversion FAQs (July 2023); Scheme Effective Date announcement and Scheme FAQs (August 2023); RDA FAQs (August 2023); Quarterly Updates 1 to 6 (November 2023 to May 2025); Temporary Suspension of Withdrawals notice (July 2025); Scheme Manager’s court application update (October 2025); Second Distribution FAQs (January 2026)
• Kroll, “Kroll facilitates successful approval of Scheme of Arrangement for Vauld”, September 2023
• FXStreet, “Crypto lender Vauld’s creditors to receive payback soon”, June 2023
• CoinDesk, “Lending platform Vauld raises $2M to grow into a full crypto bank”, December 2020
• CoinDesk, “Lending platform Vauld raises $25M in round led by Peter Thiel-founded venture firm”, July 2021
• TechNode Global, “Crypto wealth platform Vauld raises $25M in Series A”, July 2021
• CoinDesk, “Crypto lender Vauld calls off potential acquisition by rival Nexo”, December 2022
• TechCrunch, “Crypto lender Vauld suspends withdrawals, trading, deposits”, July 2022
• Fortune, “Coinbase-backed crypto lender Vauld freezes withdrawals”, July 2022
• Forbes India, “Vauld to seek moratorium against its creditors”, July 2022
• Cointelegraph, “Keys lost in the Vauld”, July 2022, and “Troubled crypto lender Vauld gets extended creditor protection”, January 2023
• Inc42, “Coinbase-backed Indian crypto exchange Vauld lays off 30% workforce”, June 2022; “Behind the fall of Coinbase-backed crypto lending platform Vauld”, July 2022; “ED freezes a company’s INR 370 Cr assets lying with Vauld India”, August 2022; “Vauld creditors file affidavit to restrict it from another moratorium extension”, February 2023
• Forkast, “Valar Ventures-backed Vauld to lay off 30% of staff”, June 2022
• BusinessToday, “Everything you need to know about Vauld”, July 2022
• Medianama, “ED vs. crypto continues with Vauld subsidiary Flipvolt’s accounts frozen”, August 2022
• Blockhead, “Vauld wins another moratorium extension from Singapore High Court”, March 2023
• Protos, “Did Vauld drive CoinLoan into court-ordered liquidation?”, April 2023
• The Week / PTI, “Vauld founders feature in Forbes Asia 30 Under 30 list” (company release), June 2022
• CryptoTimes, “Vauld investor warns Nischal and Kroll are misleading WazirX users”, September 2024
• Oquilia, “ED’s Rs 370 crore Vauld crypto freeze is now under PMLA appeal”, July 2026
• CB Insights, Vauld company financials page (funding, Liminal investment), accessed September 2026
• Tracxn and Tofler, Flipvolt Technologies Private Limited company profiles (incorporation, capital, FY24 revenue band), accessed September 2026
• Trading Economics, USD/INR, 18 September 2026

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