Hodlnaut Turns into Newest Crypto Lender to Freeze Withdrawals

Key Takeaways

  • Hodlnaut is the newest cryptocurrency lender to halt withdrawals and operations, citing “market circumstances.”
  • The agency has additionally withdrawn its utility for a digital fee token license earlier than the Financial Authority of Singapore, indicating it probably plans to cease working for good.
  • Hodlnaut beforehand disclosed that it held round $500 million in belongings beneath administration previous to halting withdrawals.

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

Hodlnaut Suspends Companies

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 current market circumstances. We’ve got additionally withdrawn our MAS licence utility. Right here is our full assertion Our subsequent replace can be on 19 Aug.

— Hodlnaut (@hodlnautdotcom) August 8, 2022

In line 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 give attention to stabilizing our liquidity and preserving belongings,” the agency mentioned reassuring customers that it was working in direction of the most effective resolution to guard their long-term curiosity. “We’ve got reached this tough resolution resulting from current market circumstances,” the agency added with out offering any additional particulars in regards to the state of its steadiness sheet.

Hodlnaut additionally revealed that it had withdrawn its utility for a digital fee token (DPT) license with the Financial Authority of Singapore, indicating it has no plans to proceed working and can probably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

Hodlnaut is simply the newest in a collection 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 major hunch within the crypto market, catching a number of notable crypto funds and repair suppliers off guard. Among the many first greatest 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 line with Hodlnaut’s since-edited LinkedIn profile, the lender not too long ago 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 get better the whole thing of their belongings. 

Disclosure: On the time of writing, the creator of this text owned ETH and a number of other different cryptocurrencies.

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