Vauld is not safe to use right now. The Singapore-based crypto lending platform froze all withdrawals, trading, and deposits on 4 July 2022 after a bank run drained over $197.7 million in customer funds in 18 days. As of mid-2026, judicial management is ongoing and users cannot withdraw funds. Do not deposit into Vauld.
If you are asking is vauld crypto app safe for new deposits, the answer is an unambiguous no. The platform has been insolvent since mid-2022, and the restructuring process under Singapore’s judicial management framework has produced no confirmed recovery timeline or guaranteed payout for creditors. The sections below explain exactly what happened, where things stand in 2026, and how to avoid the same mistake with any custodial crypto platform.
Key Takeaways Before You Read On
- Vauld froze withdrawals on 4 July 2022 citing financial challenges and market volatility following the Terra/LUNA collapse.
- The platform owed creditors approximately $402 million at the time of the freeze, according to Singapore court filings.
- Nexo, a rival crypto lender, attempted an acquisition but walked away in January 2023 after due diligence concerns.
- Vauld’s parent entity, Defi Payments Pte Ltd, was placed under judicial management in Singapore. The process is ongoing as of July 2026.
- Indian users who held funds on Vauld face the same creditor queue as global users, with no special RBI or SEBI protection covering offshore crypto lending platforms.
What Happened to Vauld: A Timeline
Vauld launched in 2020 and quickly attracted Indian retail investors with promises of up to 12.68% annual yield on crypto deposits. The platform was co-founded by Darshan Bathija and Sanju Kurian, and had backing from Coinbase Ventures and Valar Ventures, among others.
The collapse of the Terra/LUNA ecosystem in May 2022 triggered a crisis of confidence across the entire crypto lending sector. Three Arrows Capital (3AC), a major crypto hedge fund that Vauld had exposure to, went bankrupt. Celsius and Babel Finance froze withdrawals around the same time. Vauld users noticed the pattern and started pulling funds fast.
The Bank Run and the Freeze
Between mid-June and early July 2022, Vauld customers withdrew roughly $197.7 million in just 18 days, according to the company’s own public disclosure at the time. The platform could not sustain that pace. On 4 July 2022, it suspended all withdrawals, trading, and deposits.
Vauld applied to the Singapore High Court for a moratorium on debt repayment under Section 64 of the Insolvency, Restructuring and Dissolution Act. The court granted it, giving the company temporary breathing room to work out a restructuring plan with creditors.
The Failed Nexo Acquisition
Nexo announced a letter of intent to acquire up to 100% of Vauld in July 2022. It looked like a lifeline. But after months of due diligence, Nexo terminated the deal in January 2023, citing a lack of meaningful progress and unresolved issues with Vauld’s liabilities, per Nexo’s official press statement dated 25 January 2023.
That exit was a major blow. Without a buyer, Vauld had to pursue a standalone restructuring, which is slower and less certain for creditors.
Why Yield-Lending Models Break Down
Vauld’s model was simple on the surface: take deposits from retail users, lend them out to institutional borrowers at higher rates, and pocket the spread. It worked during the 2020-2021 bull market when demand for crypto loans was high and collateral values were rising.
When prices crashed, borrowers defaulted or their collateral lost value faster than it could be liquidated. Vauld, Celsius, and BlockFi all ran the same playbook and all failed within months of each other. According to the Cambridge Centre for Alternative Finance 2022 Global Cryptoasset Benchmarking Study, crypto lending platforms collectively managed over $60 billion in assets at peak 2021 levels, much of it without adequate liquidity buffers.
Where Vauld Users and Creditors Stand in 2026
The judicial management process in Singapore has been running for over three years. A judicial manager was appointed to oversee Vauld’s restructuring and negotiate with creditors. Creditors were asked to submit their claims, and a creditor committee was formed to represent their interests.
There is no confirmed date for when, or how much, creditors will recover. In restructuring cases of this type, recovery rates vary widely. For comparison, Celsius Network creditors in the US received a court-approved restructuring plan offering approximately 67 cents on the dollar in a mix of crypto and equity, per the US Bankruptcy Court for the Southern District of New York’s January 2024 confirmation order, though actual distributions stretched well into 2024.
What This Means for Indian Users Specifically
Indian users who held crypto or INR-equivalent balances on Vauld are unsecured creditors in a foreign jurisdiction. There is no SEBI investor protection fund covering offshore crypto lending platforms. The RBI has consistently warned against unregulated crypto entities, and this case is exactly why those warnings matter.
If you are an Indian user with funds stuck on Vauld, your options are limited to filing your claim in the Singapore creditor process and waiting. Any recovery you receive could still attract India’s 30% flat VDA tax under Section 115BBH of the Income Tax Act, depending on how the recovery is classified. Check with a CA familiar with crypto taxation before you file anything. You can read more about how crypto is taxed in India to understand your obligations.
A Quick Comparison: What Happened to Similar Platforms
| Platform | Freeze Date | Approx. Liabilities | Outcome (as of 2026) |
|---|---|---|---|
| Vauld | July 2022 | ~$402M (Singapore court filings) | Judicial management ongoing, Singapore |
| Celsius Network | June 2022 | ~$1.2B deficit | Chapter 11 completed; creditors partially repaid |
| BlockFi | November 2022 | ~$1.8B owed to clients | Chapter 11; partial recovery ongoing |
| Babel Finance | June 2022 | ~$800M (company disclosure) | Restructuring, Cayman Islands |
Is Any Crypto App Safe? How to Vet a Custodial Platform
The Vauld situation is a hard lesson, but it applies to any platform promising yield on crypto. Here is a practical checklist you can use before trusting a custodial service with your funds.
Checklist: 8 Questions to Ask Before Depositing
- Is it regulated? Check if the platform holds a licence from a recognised regulator (FIU-IND registration in India, MAS licence in Singapore, etc.).
- Where are your assets held? Are they in segregated wallets or pooled with company funds? Read the terms carefully.
- What is the yield source? If a platform offers 10%+ APY, ask exactly how it generates that return. Vague answers are a red flag.
- Is there proof of reserves? Reputable exchanges like CoinDCX and ZebPay publish or have committed to proof-of-reserve audits. Ask for third-party attestations.
- What happens in a liquidation? Are you a secured or unsecured creditor? For most retail users on lending platforms, the answer is unsecured, which is the lowest priority in a bankruptcy.
- What is the withdrawal process? Test a small withdrawal before depositing large amounts. Platforms that add friction or delays without explanation are a warning sign.
- Does it have a track record through a bear market? Platforms that only existed during 2020-2021 have not been stress-tested.
- Is your crypto better off in your own wallet? For long-term holdings, a cold wallet removes custodial risk entirely. You can also review our full crypto wallet security guide for a step-by-step approach.
India-Specific Platforms Worth Comparing
For Indian investors, sticking to FIU-IND registered exchanges like WazirX, CoinDCX, ZebPay, or Mudrex is a safer starting point than offshore yield platforms. These platforms are not risk-free. The WazirX hack of July 2024, where approximately $234 million in assets were stolen, is a reminder that no platform is completely immune. But at least they operate within India’s regulatory framework and are subject to some level of oversight.
The 1% TDS on crypto transfers above the threshold applies even on Indian exchanges, so keep records of every transaction for your ITR filing. A platform that does not comply with TDS rules is itself a compliance risk for you.
For a similar platform safety review, see our analysis of BotBro platform safety, which follows the same vetting framework.
Frequently Asked Questions
Is Vauld crypto app safe to use now?
No. Vauld has not resumed normal operations. Withdrawals, deposits, and trading remain suspended as of mid-2026 while the company goes through judicial management in Singapore. You should not deposit any new funds into Vauld, and existing users should file their creditor claims through the official Singapore process.
What happened to Vauld?
Vauld froze all user withdrawals on 4 July 2022 after a rapid bank run drained nearly $197.7 million from the platform in 18 days. The crisis was triggered by the Terra/LUNA collapse and the broader crypto credit crunch of mid-2022. The platform applied for judicial management in Singapore and has been in restructuring ever since.
Can Vauld users still withdraw funds?
Not freely. Withdrawals have been frozen since July 2022. Users with funds on the platform are treated as creditors in the judicial management process. Any recovery depends on the outcome of restructuring negotiations, which are still ongoing as of mid-2026. There is no confirmed timeline or guaranteed recovery amount.
How do I file a creditor claim with Vauld?
Creditors must submit their claims through the official judicial management process administered in Singapore. You should monitor announcements from Defi Payments Pte Ltd’s appointed judicial manager and the Singapore High Court case portal for submission deadlines and claim forms. Indian users should also consult a CA about the tax treatment of any eventual recovery under Section 115BBH.
Did Nexo buy Vauld?
No. Nexo announced a letter of intent to acquire Vauld in July 2022, but it walked away from the deal in January 2023 after due diligence raised unresolved concerns about Vauld’s liabilities. Without a buyer, Vauld pursued a standalone restructuring under Singapore’s insolvency framework.
Crypto carries significant financial risk. Platforms offering high yields on deposits carry additional risks beyond normal price volatility, including insolvency and loss of access to funds. Never deposit more than you can afford to lose, and always keep the bulk of long-term holdings in a wallet you control.
This is not financial advice. Data as of July 2026. Last updated: July 2026. Reviewed by the CryptoWire editorial team.
