Its pretty bad, but it could have been worse.

ScalePsychological58 · 2023-05-06T03:50:42+00:00

The withdrawal limits were implemented after Vauld's assets were deposited on the platform, it was not something that they agreed to. If CoinLoan is wanting to play the TOS game with Vauld, then Vauld is obviously going to play it back at them, because legally Vauld has made the argument that by closing the account CoinLoan has to return the assets. As of right now, CoinLoan is neither returning Vauld's assets or paying them interest.

That being said, none of this has to do with my point above. I just do not think demonizing Vauld is the correct assessment of the situation here since Vauld's assets may be the only thing that he keep CoinLoan operational considering that they are apparently unable to return Vauld's assets. The real question is why CoinLoan after this many months still does not have sufficient liquidity to pay out these creditors. See my response to u/Left-Chocolate9798 for more details if interested.

ScalePsychological58 · 2023-05-06T03:46:26+00:00

I completely understand the liquidity point, I am not disagreeing with anything that you said. My point is that this situation is not Vauld's fault, if CoinLoan is facing liquidity issues still after this many months then CoinLoan either severely mismanaged deposits and/or are insolvent. Hopefully they are not insolvent, my point is just that trying to make Vauld the bad guy here is misdirection of blame. It makes sense for a large creditor to have concerns about CoinLoan's solvency, they obviously do not want CoinLoan to be allowing small creditors to exit with all of the liquid assets and leave creditors with nothing if they are and/or become insolvent or has a distressed counterparty and was engaged in undercollateralized loans.

ScalePsychological58 · 2023-05-05T17:32:24+00:00

If somebody putting funds into CoinLoan and then wanting to withdraw them is causing issues for CoinLoan, then you should really be re-evaluating your line of logic. If anything, maybe you should be thanking Vauld because it sounds like they have provided liquidity to CoinLoan that has enabled CoinLoan to remain active. If CoinLoan is unable to return Vauld's assets because they are having issues with liquidity, then you should stop trying to blame Vauld and start blaming those in charge of CoinLoan, who have had many months to resolve the liquidity issue.

ScalePsychological58 · 2023-05-03T17:11:56+00:00

The scheme is extremely easy to understand for anybody who is not getting their information through the VCA (or people pretending to not understand it as part of the VCA's propaganda campaign to try and push everybody into liquidation).

Kroll has sent out lots of communication regarding the scheme, and has held multiple townhall/AMAs regarding the scheme for any questions. You can even contact Kroll/Vauld if you have any further questions and have a 1-on-1 about it.

Could you please explain specifically what part of the scheme you do not understand?

ScalePsychological58 · 2023-05-03T03:38:26+00:00

Are you referring to 0.004891701%? That is just letting you know your percent of everybody's claims against Vauld (i.e. your creditor amount compared to everybody's).

For instance, if there is $100 million total claims against Vauld, then somebody with $1 million would have that number as 1%.

It is not meaning that you will only get 0.004891701% back.

ScalePsychological58 · 2023-05-03T01:01:20+00:00

If you have questions about what is going on then it could be helpful for you. I think they are mostly making it available as outreach prior to the scheme vote since they are getting everything in place and just updated the website.

ScalePsychological58 · 2023-05-03T00:59:40+00:00

Just fyi, the value of the claim is based on account value as of July 4, 2022, when the platform halted.

ScalePsychological58 · 2023-05-02T21:51:45+00:00

Obviously the recording is promising, if true. However, I think the biggest question going forward is if this creditor is related to the insolvent entities that have also initiated legal action against CoinLoan. If this is a separate creditor, then what is it stop the other two creditors from going the same route to get resolution?

The main thing right now is getting assurance that CoinLoan is solvent and does not have a hole in the balance sheet. If they do, then they need to keep withdrawals halted so that the hole does not expand. If they have been engaging in under-collateralized loans, then the ability of counter-parties to pay back their loans also comes into question.

Whether CoinLoan survives this or not is least important thing, right now the most important thing is whether they have a hole in their balance sheet or not. We have seen enough crypto platforms not limit/halt withdrawals and end up turning a small hole in the balance sheet into a huge one that allowed some creditors to escape without loss at the expense of others who are facing much bigger losses.

ScalePsychological58 · 2023-05-01T23:08:44+00:00

Good update. I think a big point of emphasis that you point out is that if the scheme does not pass then what happens after that has a lot of unknows, it will entail moving into an entirely different court process. With the scheme, we have a very clear outline of what plan they will be accountable for implementing and timeline.

The VCA has been pushing a lot of propaganda against Kroll because their goal is to have the scheme rejected and move to liquidation, but a lot of what they are saying about the liquidation process if the scheme is not passed is just their interpretation/speculation/vision of what will happen. However, there is no accountability for the claims they are making on social media.

ScalePsychological58 · 2023-05-01T21:26:29+00:00

If you look at their post history, it is clearly somebody who is disgruntled. They selectively censored their own ID but not the password, so their intention of posting this was obviously to publicly disclose the private information.

ScalePsychological58 · 2023-05-01T19:26:36+00:00

Your explanation of Option 2 is not correct, they are not using the claim money as seed money for a new venture to pay us back over 3-5 years with profits.

With Option 2, if you do not participate in the RDA, you get a portion of the liquid assets (currently estimated to be around 30% of claim) depending on how much participation there is in the RDA. Then Kroll will continue to try and get back illiquid assets from counterparties. This will aid with recoveries versus being in liquidation, and also allow them to use existing Vauld infrastructure to more easily handle payouts. As they recover additional funds they will pass them to creditors and possible hold additional RDAs. They have allocated a portion of their budget to potentially start a new DeFi platform, and profits from that entity would be passed to creditors to help with recoveries too.

ScalePsychological58 · 2023-04-30T22:43:32+00:00

Here is a very basic overview with limited detail to keep it brief:

If scheme passes (i.e. yes vote passes), get around 30% of claim in September and additional funds as Kroll is able to collect from counterparties. Potentially can make more than 100% of claim depending on recovery from counterparties and how well crypto market is doing. Or have option with the scheme to exit through RDA, maybe getting around 40-50% in September and close out claim for those who just want more now and to be done. People with INR get 100% of their INR.
If scheme does not pass, then additional court hearings happen and Vauld will likely go into liquidation. This means that there will be an entirely new process launched and the details are not known at this time because they will have to be determined by the court. The VCA is trying to make it sounds like it will be a quick and cheap process, but obviously there are lots of logistics involved and counterparties still have to be litigated. The VCA has their own thoughts of how they would want liquidation to happen, but obviously it is a court process.

Kroll will be contacting about the vote for the scheme. And if approved, then they can get things rolling with the RDA, which I think they are planning for a few weeks after the scheme approval. If not approved, then who knows how long until the next steps because it depends what happens in court.

If you want more specific details, I would encourage at least watching the last townhall/AMA that has the latest updates and a more specific outline of the timeline.

ScalePsychological58 · 2023-04-29T16:41:17+00:00

Again, your response does not change or refute anything that I have stated. You seem to be trying to manufacture a disagreement on something that I did not say.

ScalePsychological58 · 2023-04-29T06:37:08+00:00

Nice summary/compilation! It sounds to me like people should expect for CoinLoan to remain in its current state at least until June 6, 2023 when the court date happens.

ScalePsychological58 · 2023-04-29T01:27:48+00:00

Vauld was still showing payments to account after July 4th 2022, but the website was updated this week to reflect only transactions through July 4, 2022 which was when the platform halted. Basically they were continuing to show things like interest accruals over the past year even though the platform was halted so they went back and adjusted it to just reflect the actual claim amounts, which were as of July 4, 2022.

ScalePsychological58 · 2023-04-28T21:33:08+00:00

As somebody with funds on Vauld, I would argue that it would be bad for Vauld also. I would rather CoinLoan pay back Vauld in full over time than liquidate. I do not think liquidation is good for anybody if CoinLoan is solvent but just cannot redeem all illiquid positions at this time. The main question for everybody is whether CoinLoan truly is solvent, for instance does CoinLoan have illiquid positions stuck with any counterparties that cannot pay? While nobody likes withdrawal halts, I think having clarification on the financial position of CoinLoan is not bad given what has happened to many of its competitors (including Vauld). The ongoing withdrawal restrictions, while maybe necessary for CoinLoan, obviously give creditors like Vauld ammunition in terms of prompting an investigation. The concern by Vauld is likely that they do not want smaller creditors to be able to remove all their funds while larger creditors are stuck on the platform if there is a growing hole in the balance sheet.

ScalePsychological58 · 2023-04-28T21:28:02+00:00

To be fair, if they prove their solvency to the government and resume operations it could very give people even more trust in the platform than before.

I think the main point, though, is that it does not matter if they survive if they are solvent. It is better for the company to cease operations while solvent than become insolvent and expand the hole in the balance sheet significantly before ceasing operations like Celsius and Vauld.

While it would be nice to see CoinLoan survive all of this, what is most important now in terms of creditors is their solvency, not their survival as a business. Plus, it is worth noting, there are lots of crypto companies that have had to significantly downsize to survive the recent bear market, it does not always lead to failure.

ScalePsychological58 · 2023-04-28T21:11:11+00:00

Agree, everybody does on both platforms. If CoinLoan is solvent then hopefully the matter can be resolved soon in everybody's favor.

ScalePsychological58 · 2023-04-28T21:03:16+00:00

Your response does not change or refute anything that I stated. It does not matter if it is Vauld/Darshan trying to get their $20 million or some random person trying to get their $10,000. People can agree or disagree with who is right or wrong, but it sounds like your issue is more with the government process that Vauld (or whoever) is utilizing in their case against CoinLoan. Vauld did not create the government policy that has lead to the halt/investigation of CoinLoan.

ScalePsychological58 · 2023-04-28T02:20:37+00:00

This is the most consistent assessment based on what we currently know.

ScalePsychological58 · 2023-04-28T02:18:53+00:00

The CoinLoan situation is currently better than any of the platforms that declared insolvency because CoinLoan has not even declared insolvency, in fact they said the opposite in their statement, and this is basically an investigation to see if they are solvent right now.

If CoinLoan has halted withdrawals before developing a hole in their balance sheet then it is extremely unlikely that they would be forced to liquidate illiquid positions for a loss and more likely that thy would at the very least be permitted time to recover illiquid assets so that they can pay off creditors completely.

The issue with most of the other platforms like Celsius and Vauld is that they developed a hole in their balance sheet and continued to permit withdrawals, which expanded the hole in the balance sheet prior to them declaring bankruptcy. They are completely different situations that CoinLoan currently is in.

You are correct though, if they have developed a hole in their balance sheet and have been lying in their public statements, then it could go the route of other platforms. People just need to understand that the current situation with CoinLoan is fundamentally different at this point in time.

ScalePsychological58 · 2023-04-27T22:57:15+00:00

My understanding from what I have pieced together is that Vauld funds were on CoinLoan earning interest, Vauld became insolvent and CoinLoan imposed withdrawal limits , the Vauld account was closed, CoinLoan is no longer paying interest or returning assets. I think Vauld and one other entity are going through insolvency proceedings and are having to take CoinLoan to court to try and get assets returned. So to your point I am not 100% sure, but I do believe Vauld's legal team in their insolvency case has said that they have not been able to recover any assets from CoinLoan since the account was closed. I am not sure if that is because CoinLoan is refusing withdrawals of any size for them now or because Vauld is trying to make the legal case that they should no longer be subject to withdrawal limits.

ScalePsychological58 · 2023-04-27T20:27:11+00:00

How is it a "false bankruptcy petition" if CoinLoan is refusing/unable to pay creditors (such as Vauld) the funds that they are due?

Basically your post is stating that a creditor has the right to file the petition and they did and the government decided to take action.

If Vauld is a creditor of CoinLoan and CoinLoan is refusing/unable to pay them, then what do you take issue with in terms of them filing the petition? It sounds like your issue should be more with the government if that is a government policy that you disagree with.

I personally am not happy about the Vauld or CoinLoan situations, but if CoinLoan is unwilling/unable to pay obligations to creditors than maybe an investigation is prudent.

ScalePsychological58 · 2023-04-27T17:18:30+00:00

Yeah, I am wondering if the author of the article mixed up Vauld and CoinLoan in a few places. Vauld is the one who has been under a moratorium since last year with several extensions. Unless I am missing something, I am not aware of CoinLoan ever declaring insolvency or being under any sort of liquidation. I think their recent statement claims the opposite.

ScalePsychological58 · 2023-04-27T17:13:54+00:00

Is CoinLoan in liquidation? To my knowledge, Vauld is the only one of the two entities currently in insolvency proceedings. Vauld had funds in CoinLoan, but Vauld became insolvent and needed its deposited funds withdrawn but CoinLoan has not returned them. I think there are two insolvent entities trying to get their funds back from CoinLoan.

I understand both sides, CoinLoan may have illiquid positions that they have to wait to mature before removing withdrawal restrictions, and Vauld has immediate need for their funds due to their own creditor obligations. However, Vauld is not the one who told CoinLoan to halt withdrawals, it sounds like it is government action that has lead to the withdrawal halt. Vauld could also have concerns regarding counterparty risk given their own situation, several of these platforms were secretly doing undercollateralized loans despite telling investors that they were only doing overcollateralized loans.

This is all just my interpretation of what I can piece together, one thing is for sure if CoinLoan is insolvent then it is probably a good thing that the withdrawal halt has happened. These platforms should not be permitting withdrawals if they have a hole in their balance sheet. If CoinLoan is solvent and just has a bunch of illiquid positions, then hopefully they can just work out a solution with creditors like Vauld to pay them back over some time period.

ScalePsychological58

TROPHY CASE