[HN Gopher] Peter Thiel-Backed Crypto Lender Vauld Suspends With...
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       Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals
        
       Author : crhulls
       Score  : 13 points
       Date   : 2022-07-04 22:26 UTC (35 minutes ago)
        
 (HTM) web link (www.wsj.com)
 (TXT) w3m dump (www.wsj.com)
        
       | dangle1 wrote:
       | https://archive.ph/0tsZR
       | 
       | "The platform, Vauld, said Monday that it froze the operations
       | after users pulled almost $200 million over the last three
       | weeks."
        
       | Barrera wrote:
       | > A cryptocurrency lender backed by Peter Thiel and Coinbase
       | Global Inc. suspended withdrawals, trading and deposits on its
       | platform, citing volatile market conditions and financial
       | difficulties facing key business partners.
       | 
       | > The platform, Vauld, said Monday that it froze the operations
       | after users pulled almost $200 million over the last three weeks.
       | A sharp decline in cryptocurrency prices that began with the
       | collapse of two cryptocurrencies in May has spooked traders and
       | caused knock-on effects in the digital asset world.
       | 
       | It's called "a bank run":
       | 
       | > A bank run or run on the bank occurs when many clients withdraw
       | their money from a bank, because they believe the bank may cease
       | to function in the near future. ...
       | 
       | https://en.wikipedia.org/wiki/Bank_run
       | 
       | Except this bank has no FDIC insurance, no backstop, nothing.
       | 
       | Oddly enough, I think US tax policy may play a factor here in
       | motivating people to ignore the repeated and loud warnings about
       | how this was a really, really bad idea. When you're facing
       | massive capital gains taxes, and have an inkling that those gains
       | will turn to losses, the idea of lending out the asset, spending
       | the cash without incurring tax, then getting the asset back
       | starts to look attractive.
       | 
       | Of course, the real problem was that those warnings got ignored.
       | I mean, who reads something like this without alarm bells going
       | off all over the place?
       | 
       | > Our interest rates and trading fees are among the best in the
       | industry. You can earn interest of up to 11.57% (APY) on your
       | cryptocurrencies, and borrow tokens with our spread being as low
       | as 1%. We don't charge deposit or withdrawal fees, or fix a cap
       | on your daily withdrawals. You can check all our fees and rates
       | here.
       | 
       | https://www.vauld.com/home
        
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       (page generated 2022-07-04 23:01 UTC)