Hodlnaut avoided exposure to 3AC. Earlier they denied ever purchasing UST. Yet many reports and on-chain data showed something else. This lending company at one point owned more than $150 priced UST. It blamed the conditions of the market and the absence of liquidity. They became the latest company that suspended withdrawals along with deposits.
The cryptocurrency lending firm made an official declaration. They claimed that market conditions forced them to suspend their services. They are working on recovery plans. They stated that they have withdrawn their regulatory license application in the country. Thus they will no longer be capable of offering any features of token swaps. Their official declaration said that they are working on a plan of recovery. They hope to give updates and details as soon as permissible. They are consulting on feasibility. Also their intended execution plan timeline with Damodara Ong LLC. They are strategizing their plan of recovery. They kept in mind the best interests of their users.
The current situation
Hodlnaut said in one statement that the company halted withdrawals. Also, token swaps along with deposits got halted. It was with immediate effect because of the current market conditions. This crypto leader said that they took such a difficult decision. It was for focussing to stabilise their liquidity and preserve assets. The company will work and find the perfect way of protecting the long-term interests of users.
They mentioned that they withdrew their license application with the Monetary Authority of Singapore. They said that it is not providing regulated digital payment tokens services. It included the token swap feature. To avoid any doubt, the company will also be ceasing every borrowing as well as lending services.
This cryptocurrency lending platform said it will be suspending all of its social media accounts except for the official Telegram and Twitter. Thus the leading crypto firm will be addressing every user communication only via email, Hodlnaut Telegram, and Twitter. Apart from the suspensions of social media, Juntao Zhu, the founder went private on Twitter. The next update of the company will be released on 19th August 2022.
The crisis of crypto lending started with the Terra which now got renamed Terra Classic ecosystem collapse along with the Three Arrow Capital, the leading cryptocurrency hedge fund’s bankruptcy. The continuous market tensions created one domino impact for cryptocurrency lenders with exposure to hedge funds and the ecosystem of Terra. Some primary cryptocurrency lenders such as Blockchain.com, Celsius, and Voyager Digital suspended their services.
Last month Celsius and Three Arrows Capital filed for bankruptcy. It is one of the high-profile failures. Hodlnaut got named as one of the institutional clients of Celsius as per court filings. Hodlnaut along with the MAS immediately did not respond to any request for comment sent outside their office hours. Singapore is the main center for crypto as well as blockchain in Asia. It has seen many cryptocurrency firms run into challenges in recent times.
Hodlnaut managed to avoid any exposure to 3AC. Yet few reports claimed that the company was not much transparent about their investments in the now defunct algorithmic stablecoin of Terra. Twitter handle Fatman published a report in June. It pointed towards Hodlnaut’s huge exposure during the de-peg of the stablecoin and how they misrepresented their spot.
Zhu claimed that the company neither purchased any UST nor they incurred any losses on the yield services of UST. Yet failed to offer documentation as proof. There has been an apparent downfall of another cryptocurrency lending platform. It invoked some furious reactions from the community of crypto with a lot advocating for investors to store their cryptocurrency off-exchange. Others also pointed toward the domino impact that this collapse of UST created in May with impacts being seen even today.
Conclusion
Hodlnaut got launched back in 2019. Hodlnaut let investors earn interest in their cryptocurrency. It is by lending out all their tokens. It is one of the many crypto lenders that suffered from the current rout in the prices of digital assets. It has wiped almost $2 trillion from this sector. Are you new to Crypto trading and investments? Then you must check the Bitcoin trading platform Bitqs.
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