Evaluating only Vauld’s profile at its peak — without knowing the outcome — the model ranked Market collapse as the #1 likely cause. That’s exactly how it died.
Key Events Timeline
FOUNDING
Vauld founded
LAYOFF
Market downturn forces cuts
SHUTDOWN
Sudden Collapse: Vauld ceases operations
Full Analysis
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Documented cause
Vauld was a Singapore-headquartered crypto lending and trading platform backed by Peter Thiel's Valar Ventures, Coinbase Ventures, and Pantera Capital, which raised $25 million in 2021. The platform offered yields of up to 12.68% APY on crypto deposits by lending to institutional borrowers and deploying capital in DeFi protocols. When crypto markets collapsed in mid-2022 and key counterparties including Three Arrows Capital defaulted, Vauld faced a liquidity crisis. Users withdrew approximately $197.7 million in the 13 days before the platform suspended withdrawals in July 2022. Vauld filed for judicial management in Singapore in July 2022.
Alternative account: Vauld was founded in Singapore and India in 2018 to offer retail crypto lending and yield products, allowing users to earn interest on their crypto holdings while the company deployed those assets in institutional lending. The company raised $25M from Coinbase Ventures, Pantera Capital, and others. Vauld had significant exposure to Three Arrows Capital through its lending operations. When 3AC defaulted in June 2022, Vauld's institutional lending book suffered heavy losses. The company froze customer withdrawals in July 2022 and applied for a judicial management order in Singapore—the local equivalent of Chapter 11. Nexo, a larger crypto lender, entered into acquisition discussions that ultimately did not complete.
Lesson
“Offering yields that are structurally impossible without excessive risk is not a business model. It is a liability that compounds in silence until a market event makes it visible all at once.
Alternative account: Before depositing crypto in a yield platform, ask: who is the institutional borrower? What are their collateralisation requirements? What happens to my deposit if the borrower defaults? If the platform cannot answer all three, your "yield" is compensation for undisclosed counterparty risk you cannot evaluate.”