Following the announcement of withdrawal suspension by Vauld, the crypto exchange is facing huge criticism that borders on its unreliable business services.
Binance CEO Chengpang “CZ” Zhao slammed Vauld, a Singapore-based crypto exchange, and financing business, on Twitter.
CZ warned against using platforms that require VC investment in response to a report on Vauld’s suspension of withdrawals. He feels that such businesses lack a solid business model.
CZ’s criticism is understandable given that one of the companies funding Vauld is Binance’s competitor, Coinbase. Vauld is also backed by Peter Thiel’s Valar Ventures and Pantera Capital.
Ripple CEO David Schwartz also made fun of Vauld, tweeting, “RIP Vauld.”
Vauld published a corporate statement earlier today announcing the suspension of all withdrawals, trading, and deposits on their platform, citing market instability. The platform blamed the crypto market’s downturn on Terra’s failure, Celsius’s suspension of withdrawals, and 3AC’s debt default. It revealed that about $200 million had been removed since June 12th, 2022.
The suspension contradicts statements made by its CEO, Darshan Bathija, earlier this month. Bathija denied any exposure to Celsius or 3AC in a blog post and reiterated the company’s ability to stay liquid despite the severe market conditions. Furthermore, Alex Svanevik, CEO of Nansen.ai, disclosed that Vauld’s main account had a high volume of transactions with 3AC. Vauld also revealed 3AC’s insolvency in a blog post a month ago.
Svanevik did note, however, that the interactions with 3AC occurred about a year ago and may not necessarily indicate exposure.
Vauld is the latest in a string of centralized exchanges to cease operations. Companies such as Three Arrow Capital and Celsius have also halted operations, citing the bear market. As a result, many people have spoken out against the exchanges.
Lark Davis, a significant crypto investor, and influencer, strongly advised his followers to withdraw their cryptocurrency from controlled exchanges. Dennis Porter, CEO of Satoshi Act Fund, advised against storing any measurable cryptocurrency on exchanges, including famous ones like Coinbase.
