Hodlnaut Becomes Latest Crypto Lender to Freeze Withdrawals

Hodlnaut has mentioned it’s engaged on a restoration plan with out disclosing any extra info in regards to the present standing of customers’ funds.

Hodlnaut Suspends Providers

Singapore-based crypto lending platform Hodlnaut has entered disaster mode. 

Pricey customers, we remorse to tell you that we’ll be halting withdrawals, token swaps and deposits instantly resulting from latest market circumstances. Now we have additionally withdrawn our MAS licence software. Right here is our full assertion https://t.co/5KfHUBzWsn Our subsequent replace can be on 19 Aug.

— Hodlnaut (@hodlnautdotcom) August 8, 2022

In accordance with a Monday announcement, the lender has paused withdrawals, token swaps, and deposits amid liquidity points. “We wish to reassure you that this tough resolution was taken for us to deal with stabilizing our liquidity and preserving belongings,” the agency mentioned reassuring customers that it was working in direction of the very best resolution to guard their long-term curiosity. “Now we have reached this tough resolution resulting from latest market circumstances,” the agency added with out offering any additional particulars in regards to the state of its stability sheet.

Hodlnaut additionally revealed that it had withdrawn its software for a digital fee token (DPT) license with the Financial Authority of Singapore, indicating it has no plans to proceed working and can doubtless file for chapter. The agency additionally restricted its social media presence to electronic mail, Twitter, and Telegram, saying it wished to “consolidate [its] efforts and provides correct info promptly.” The lender has additionally taken down its team page, whereas Hodlnaut founder Juntao Zhu has set his Twitter profile to privatem. 

Hodlnaut is just the most recent in a sequence of centralized crypto platforms to both go bankrupt or severely restrict their operations within the aftermath of Terra’s collapse in Might. The collapse—which noticed the worth of Terra’s native token LUNA plummet to zero within the house of some days—led to a big stoop within the crypto market, catching a number of notable crypto funds and repair suppliers off guard. Among the many first largest funds to explode following Terra’s collapse was Three Arrows Capital, whose failure to honor loans plunged a number of crypto lenders, together with Celsius, Voyager Digital, Vauld, and Babel Finance, into extreme liquidity and solvency crises.

In accordance with Hodlnaut’s since-edited LinkedIn profile, the lender lately held round $500 million in belongings beneath administration . It’s price noting that if the agency’s phrases of service resemble these of Celsius and Voyager, the depositors could also be categorized as unsecured collectors within the case of chapter. That would imply that they’re unable to recuperate the whole thing of their belongings. 

Disclosure: On the time of writing, the writer of this text owned ETH and several other different cryptocurrencies.