As the management of Vauld ties to come up with a solution to the financial challenges, the situation raises doubts over exchange security. Earlier on Monday, the Singapore-based exchange suspended all withdrawals, trading and deposits on its platform.
Funds Safe On Vauld
Meanwhile, as the overall cryptocurrency ecosystem tries to cope with the volatile environment, calls for securing assets off the exchanges are rising. In the case of Vauld, its funds are managed through a multi signature system with the co-founders as signatories.
Also, Vauld claims that almost all of its funds are kept in a cold wallet. This means it is not connected to the internet and thus is almost immune to external attacks, it explained.
As Vauld is also a lending platform, the user funds are moved from user wallets to a centralized lending pool. From this pool, the money is lent to borrowers. Vauld’s centralized lending pool is stored with BitGo, which is a top player in the cryptocurrency custody segment.
The funds are managed by BITGO through a multi signature system, which ensures that funds safe Vauld. However, to be prepare for the worst the funds on the lending pool are also insured for $100 million dollars against potential threats.
