Vauld Q&A 26 Feb 2025: Key Updates and Next Distribution

A Q&A session was held in February 2025 to update Vauld creditors on the progress of asset recovery and the restructuring process. Here are the highlights of the discussion:

Asset Recovery Updates:

1. Counterparty A: The arbitration process is ongoing and remains confidential. While the goal is to reach a resolution in 2025, the enforcement of any potential judgment remains a significant risk. The potential value of the claim is estimated to be over $400 million in crypto terms.
2. CPA Loan: The $42 million CPA loan remains a disputed matter and is central to the ongoing arbitration with Counterparty A.
3. CoinLoan: A recovery of around 60%+ is expected for Defi Payments from CoinLoan. The funds are held in USDT and EUR, and the CoinLoan trustee anticipates distributions by Q2 2025.
4. FTX Claim: The FTX claim has been sold on the secondary market, and funds are expected before the CoinLoan recoveries, also in Q2 2025. It is estimated that Vauld will receive around USD 7.5 million or more from this sale.
5. Flipvolt India Seized Funds: Legal fees for the Flipvolt matter have reached approximately $900,000. Vauld is considering changing legal counsel and pursuing a new legal strategy.
6. Terraform Labs: A claim will be filed by the deadline in April 2025.

Distributions:

1. The next distribution is expected in Q2 2025, utilizing proceeds from both the FTX claim sale and the CoinLoan distribution.
2. The total expected from these two illiquid assets is around $25-30 million, and the estimated distribution is around 10-12% of the remaining claims.
3. Future distributions will depend on recoveries from FTX, CoinLoan, and Counterparty A.
4. Distributions may be in stablecoins or tokens, but not fiat. If recovered assets are in a different token than a creditor's holdings, conversion at market rates at the time of distribution will occur
5. The possibility of a Reverse Dutch Auction (RDA) for a final payout option is being considered based on creditor feedback.

Withdrawals:

1. The Vauld team is working to streamline and enhance security for withdrawals.
2. The withdrawal system is expected to be fully operational in advance of the next distribution in Q2 2025 .

Cost Fund and Asset Movements:

1. The cost fund was allocated under the Scheme to fund the restructuring
2. It is currently placed in rolling term deposits at commercial bank rates .
3. Detailed disclosure of token movements and cost fund allocations is not provided to creditors but is overseen by the board, including the Creditor Representative. Transparency regarding the running balance, interest earned, and usage of the cost fund was requested by creditors.

New Business:

1. The new business has not yet been launched and remains under board review.

Creditor Representative (CR):

1. Significant concerns were raised regarding the responsiveness and communication of the current Creditor Representative .
2. The Scheme managers acknowledged these concerns and indicated they may be open to appointing another creditor representative to help facilitate communication .
3. Dissatisfied creditors have the right to call for a Scheme Creditors’ Meeting to address this issue.

Transparency and Communication:

• Many creditors expressed feeling left in the dark and requested more transparency regarding financial decisions and asset movements .
• Concerns about the control of information flow during town hall meetings were raised .

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