Why are you opening the Initial RDA for a second round of bidding?

We are opening the second round of bidding to give creditors more time to bid, to allow improve the bid mix and maximize participation for creditors who need the liquidity.

Who can bid in the second round of Initial RDA bidding?

All Variable Recoveries Track creditors can bid in the second round of the Initial RDA bidding. Pro-Rated Track creditors cannot participate in the Initial RDA.

How does the second round of Initial RDA bidding affect my previously submitted bid?

If you do not choose to submit another bid, your previously submitted bid will remain. If you choose to submit another bid, your new bid will replace your previous bid entirely.

How does the second round of Initial RDA bidding affect the timing of bids?

If you do not choose to submit another bid, your previously submitted bid and its associated timing will remain. If you choose to submit another bid, your new bid and its associated timing will replace your previous bid entirely, including in terms of associated timing. If you did not previously bid, any submitted bid in the next round of Initial RDA bidding will be accompanied by its associated timing.

If I did not previously submit a bid, can I submit a bid in the second round of Initial RDA bidding?

If you are a Variable Recoveries Track creditor, you can submit a bid in the second round of the Initial RDA bidding regardless of whether you had previously submitted a bid.

What was the outcome of the first round of Initial RDA bidding?

As the Initial RDA is still ongoing, it is not appropriate to comment on the outcome of the process. A report on the overall performance of the Initial RDA (including both rounds of bidding) will be generated in due course.

How does input validation work?

Input validation is applied to specific bid cells in the Initial RDA bid form to ensure that any bids entered will not automatically be disqualified. If you are trying to enter a percentage bid that is being flagged by the input validation as inappropriate, such a bid falls outside the acceptable USD % Recovery range and will be automatically disqualified even if the input validation had not been implemented.

As a general guide, any Converted Token Balances will have an acceptable token bid range of 30 – 55% due to the conversion mechanism that eliminates the impact of price movements between 4 July 2022 and the time of Initial RDA bid assessment, allowing a percentage token bid to result in the same percentage USD Recovery. Input validation to restrict bids to 30 – 55% will apply to all bids on Converted Token Balances.

Any Unconverted Token Balances will have an acceptable token bid range that depends on the pricing at the time of Initial RDA bid assessment. The indicative ranges set out below represent the acceptable token bid ranges using token prices as at 10 August 2023 for reference, which is also shown in the Initial RDA bid form:

Please explain with an example. Say if I want to recover 40% of my claims across all the tokens, what should be my bid for both converted and unconverted balances?

Creditors participating in the RDA will be voting a % of their crypto.
If you are looking to recover 40% of your claims across all the tokens, here is our suggestion:

Creditors participating in the RDA will be informed of the outcome of their bid upon the conclusion of the Initial RDA.

What is RDA? How will the RDA be conducted?

Under the terms of the Restructuring Proposal, the Debt Tender Offer would be conducted by way of a Reverse Dutch Auction (“RDA”).

Only Scheme Creditors on Variable Recoveries Track ("VRT") can participate in the Initial RDA. Up to USD50m (which will be reduced proportionately to the percentage of Variable Recoveries Track Scheme Creditor Approved Claims over total Scheme Creditor Approved Claims as at the Effective Scheme Date) will be used in the Initial RDA (“Buyback Assets”). Scheme Creditors on the Pro-Rated Track ("PRT") are not eligible to participate in the RDA.

VRT Scheme Creditors will be invited to participate in the Initial RDA for the Buyback Assets by offering their claims in the Restructuring up for purchase at a discount by Defi Payments. Bids may be submitted for full or partial participation of claims, which will be applied on the same basis across all tokens in Scheme Creditors' Vauld Accounts.

In a traditional auction there is one seller and many bidding buyers . Any buy bid offering the highest price will be accepted first, followed by the bid offering the next highest price.

In an RDA, there will be many sellers (VRT Scheme Creditors), but only one buyer (Defi Payments) considering such offers. Any ask offer setting out the highest offered discount, i.e. the lowest selling price, will generally be accepted first, followed by a sale offer setting out the next highest offered discount, i.e. the next lowest selling price, and so on. This process goes on until the available Buyback Assets have been used up. Priority for identical bids will be allocated on a first-come-first serve basis.

For example, if there are 3 creditors making ask offers in the RDA:

Creditor A: Offers to sell claims in the Restructuring at a 70% discount, i.e. a 30% recovery;

Creditor B: Offers to sell claims in the Restructuring at a 60% discount, i.e. a 40% recovery; and

Creditor C: Offers to sell claims in the Restructuring at a 50% discount, i.e. a 50% recovery.

Creditor A’s offer will be accepted first as it represents the highest offered discount. Thereafter, for as long as Buyback Assets remain available, Creditor B’s offer will be accepted next and Creditor C’s offer after both Creditors A and B. For the Initial RDA, bids will be accepted on the basis of USD % Recovery - bids with lower USD % Recovery will be accepted in priority to bids with higher USD % Recovery.

The claims of VRT Scheme Creditors who do not participate or who are unsuccessful in the Initial RDA and PRT Scheme Creditors will remain in the Restructuring. Only VRT Scheme Creditors will derive the benefit of reduction in claims as a result of successful Initial RDA bids having their associated Approved Claims being written off and extinguished.

What is the purpose of RDA?

The Reverse Dutch Auction(s) give Variable Recoveries Track Creditors the optionality to exit the Scheme early at different stages. The Initial RDAs specifically is intended to give Variable Recoveries Track Scheme Creditors an option to exit early at a potentially higher recovery than: (i) if all Liquid Assets were distributed pari-passu without the Initial RDA, or (ii) stay in the Restructuring and be potentially rewarded for taking on the risk in relation to recoveries of Illiquid Assets.

What will be the minimum and maximum bid threshold?

Bidding will be carried out on a percentage token basis, applied against the token balance submitted for the Initial RDA. For example, a 45% bid on a 100 BTC balance indicates that the creditor is bidding 45 BTC.

To provide flexibility for market price movements between the submission of the bid and the completion of the Initial RDA, there will be no limitation imposed on the percentage bids that can be submitted.

For the Initial RDA, the target threshold level of USD % Recoveries derived from token bids will be set at a minimum of 30% and maximum of 55%. This means that if the submitted token bid results in a USD % recovery outside of the 30 - 55% range, the bid will be disqualified and rejected.

Guidance on token bid ranges resulting in a 30 - 55% USD % Recovery will be provided in the Initial RDA Bid Form based on prices as at Effective Scheme Date. Please note that any token price movements subsequent to the Effective Scheme Date will result in these token bid ranges shifting.

How much funds will be allocated for initial RDA?

Up to USD50,000,000 (which will be reduced proportionately to the percentage of Variable Recoveries Track Scheme Creditor Approved Claims over total Scheme Creditor Approved Claims as at the Effective Scheme Date) of the Liquid Asset pool apportioned for the Variable Recoveries Track Scheme Creditors will be used for the Initial RDA.

When will the Initial RDA take place?

The bidding in the Initial RDA will take place from 21 August 2023, 0000hrs SGT to 25 August 2023, 2359hrs SGT.

Will the RDA be available for creditors with INR balance (i.e. Flipvolt creditors)?

No, the Initial RDA is only available to Scheme Creditors of Defi Payments on the Variable Recoveries Track.

Will the RDA participation be allowed for Pro-Rated Track Creditors?

A Pro-Rated Track Creditor will not be able to participate in any RDA. Scheme Creditors who did not wish to participate in any RDA and its associated exposures made an irrevocable decision to opt out of the Variable Recoveries Track as a Pro-Rated Track Creditor.

By mistake I made a choice to opt in for Pro-Rated Track and I want to change it.

Sorry! The choice of opting for Pro-Rated Track stands irrevocable.

Are we voting a % of our total Crypto? Or a % of the USD Value as of 4th July 2022?

Creditors participating in the Initial RDA will be voting a % of their crypto.

For Unconverted Vauld Account balances, indicative bid ranges based on the most recent extracted closing token prices will be included in the Initial RDA Form, which are used to remove the impact of token prices between 4 July 2022 and the time of the Initial RDA. This token bid range adjustment aligns token bid ranges with USD % Recoveries in the range of 30 - 55%, preventing arbitrage opportunities in the Initial RDA. You are free to bid outside of this indicative range however only bids that fall within the USD % Recovery range of 30 - 55% based on current market prices can be accepted in the Initial RDA, and token bids that result in USD % Recoveries outside this range will automatically be disqualified.

For Converted Vauld Account balances, the Conversion accounts for price movements since 4 July 2022. Accordingly, the adjustment mechanism is not applicable and bids on converted token balances shall be within the 30 - 55% range in order to qualify for the Initial RDA.

Withdrawals from the Vauld Platform (as assets are received) – What rate (%) does the platform intend to levy on withdrawals?

Vauld does not levy fees for withdrawals out of the Vauld platform. However, when users transfer their crypto holdings out to other platforms, they may incur gas and/or network fees for the transaction, which will be borne by the creditor.

When will the RDA payments be distributed (or) withdrawals be allowed?

The bidding in the Initial RDA will take place from 21 August 2023, 0000hrs SGT to 25 August 2023, 2359hrs SGT.

Distributions of recoveries from successful bids in the Initial RDA are expected to be carried out between 28 August – 8 September 2023

What is the difference between Variable Recovery Track and Pro Rated Track?
Scheme Creditors who did not wish to participate in any RDA and its associated exposures made an irrevocable decision to opt out of the Variable Recoveries Track as a Pro-Rated Track Creditor. A Pro-Rated Track Creditor will not be able to participate in any RDAs.

Variable Recoveries Track Creditors will achieve different levels of recovery under a Scheme depending on their participation in RDA(s) and the overall outcome of each RDA.

Pro-Rated Track Creditors will only receive their proportionate share of Liquid Assets and realized Illiquid Assets in line with their percentage share of Approved Claims from the Pro-Rated Track Liquid Assets or the Pro-Rated Track Recovered Illiquid Assets (as appropriate). They will avoid all exposure to RDAs, including the upside from creditors exiting the Restructuring at a discount or downside from having Liquid Assets used to fund the exit of successful RDA bids.

After the 1st distribution through liquid assets, will the subsequent distributions happen only if the illiquid assets are recovered in full?

No, subsequent distributions can still happen if partial recoveries are made on Illiquid Assets.

Per clause 9.4(a) of the Scheme, at the end of every 6 months after the Effective Scheme Date if there is a net recovery of at least USD10m (partial or full) the Company will distribute the recovery either by way of RDA or pari passu distribution.

Please explain partial RDA - does this have to be wholesome? For e.g. I have 10 BTC, 10 ETH. Can I bid 5 BTC and 5 ETH.

The percentage submitted for partial RDA will be applied pro-rata across the Scheme Creditor's token balance in their Vauld Account.

For example, if 50% submitted for the Initial RDA and applied to 10 BTC and 10 ETH, only 5 BTC and 5 ETH will be submitted for the RDA.

What kind of statistics will be shared with Creditors after the initial RDA?

Following the conduct of an RDA, the Scheme Manager may disclose certain statistics on the RDA, including the:

- total number of bids and value of claims submitted for the RDA;

- the range of bids submitted for each token;

- number of successful bids;

- the range of bids accepted for each token;

- value of assets utilised for the RDA;

- claims extinguished from the RDA and the remaining Claims in the Restructuring; and

- detailed information on an Variable Recoveries Track Creditor’s own bid upon request by that Variable Recoveries Track Creditor.

Is it true that one who doesn't participate in the RDA has to wait 3 years?

Scheme Creditors who don't participate (by choice or eligibility) in the Initial RDA will receive a distribution of their share of the remaining Liquid Assets 1 month after the conclusion of the Initial RDA. This is expected by the first week of October 2023.

In the case where Illiquid Assets are recovered in the midst of the Scheme (estimated 3 years), at the end of every 6 months after the Effective Scheme Date if there is a net recovery of at least USD10m (partial or full) the Company will distribute the recovery either by way of RDA or pari passu distribution.

It is speculated that one will definitely lose money if you participate in the RDA. Please clarify.

Creditors participating in the RDA can in fact have a better financial recovery than those who don't participate in the RDA, If we assume that major receivables – such as the one from CPA – are impaired.

In this scenario, The creditors will have an option to choose a discount between ~70% to 45%, i.e. 30% to 55% recovery. Assuming on an average, people take part in the RDA at ~60% discount (ie: users recover 40% of assets), even with full take up, those who do not participate in the RDA will receive ~25%.

Thus, in this specific situation, participating in the RDA leads to better financial outcomes.

Could you share some worked examples to differentiate the recovery estimated between Variable Recovery Track and Pro-Rated Track?

The Recoveries to Creditors under the Scheme are illustrated in our Scheme Documents. Please refer to page number 9,10 and 24 of our Explanatory Statement.

Will I be allowed to change my bid during the RDA?

No. Every Creditor who opts for RDA will be allowed to submit their bid only once.

I didn't receive the email with the RDA form link and unique code. What to do?

RDA participation is allowed only for Variable Recoveries Track creditors.

If you are a Variable Recovery Track Creditor and still unable to find this email:

- Please check for an email from [email protected] with the subject line: DEFI PAYMENTS PTE. LTD – RDA Forms Login Details, either in your Inbox, spam and all the email folders.

- If you are still unable to find this email, please contact Vauld customer support at [email protected]

How will I get to know if my bid was successful or not?

Creditors participating in the Initial RDA will be informed of the outcome of their bid upon the conclusion of the Initial RDA.

Will I get a document to show that I the rest of my claim is written off for tax purposes? Yes, Vauld can provide substantiation of losses to creditor if they need it for tax purposes. Creditors can reach out to Vauld Care to request for the information they require after the Effective Scheme Date and information provided will be on a case-by-case basis.

During the RDA, can I get to know the bidding % of other Creditors? If not, why?

We encourage creditors to bid for their claims based on their individual circumstances. Information on other creditors bids will not be disclosed.

Is it legal to make creditors bid against each other for their own deposited money? As the Scheme has been sanctioned by the Singapore Courts, the Scheme (including the Initial and Subsequent RDAs) are legally binding on all creditors.

If my bid was successful, will I be settling my claims with Vauld? Will I get a settlement statement?

Yes, all Approved Claims associated with the successful bid in the Initial RDA will be settled and written off. You will receive an email notification from Vauld stating that your bid was successful. After which, the Vauld app will be updated to reflect the amounts withdrawable. Amounts can only be withdrawn subject to completion of KYC.

With recent increase in the prices of BTC & XRP, we are likely to get 40-43% through pari-passu. Why will Creditors still opt for 45% through RDA?

The accepted USD % Recoveries range of 30 - 55% for the Initial RDA still allows for eligible participating Scheme Creditors to achieve recoveries from Liquid Assets in excess of what is possible through a pari-passu distribution, faster than Scheme Creditors who do not participate in the Initial RDA.

While there is a restriction to bid above 55%, it is also told that the bid might fall? Is there any upper limit for bidding?

Creditors participating in the Initial RDA will be voting a % of their crypto.

For Unconverted Vauld Account balances, indicative bid ranges based on the most recent extracted closing token prices will be included in the Initial RDA Form, which are used to remove the impact of token prices between 4 July 2022 and the time of the Initial RDA. This token bid range adjustment aligns token bid ranges with USD % Recoveries in the range of 30 - 55%, preventing arbitrage opportunities in the Initial RDA. You are free to bid outside of this indicative range however only bids that fall within the USD % Recovery range of 30 - 55% based on current market prices can be accepted in the Initial RDA, and token bids that result in USD % Recoveries outside this range will automatically be disqualified.

For Converted Vauld Account balances, the Conversion accounts for price movements since 4 July 2022. Accordingly, the adjustment mechanism is not applicable and bids on converted token balances shall be within the 30 - 55% range in order to qualify for the Initial RDA.