Distressed Crypto Lending Protocol Hodlnaut Sends Home 40 Employees, Applies for Singapore’s Judicial Management 

  • In order to further stabilize its liquidity crisis, Hodlnaut has noted that it is changing all open term interest rates to 0 percent APR from 22 August, 5pm (GMT+8).
  • In fact, most of the Hodlnaut customers are pushing for the company’s Btc and ETH assets to be liquidated, and the proceeds shared amongst themselves.
  • Reportedly, the company’s liquidity crisis resulted from TerraUSD crash, unusually high volumes of withdrawals, and the overall decline in cryptocurrency prices.

After halting withdrawals, deposits, and internal token swap, crypto lending protocol Hodlnaut has announced today that it has sent home 80 percent of its employees, 40 people to be precise. According to the company through a blog post, only necessary headcount have remained to ensure operations of key functions.

The company has indicated that it has resolved to be placed under judicial management. Hodlnaut has said that replacing its management with a Judicial representative will ensure users interest is placed first.

In order to further stabilize its liquidity crisis, Hodlnaut has noted that its is changing all open term interest rates to 0 percent APR from 22 August, 5pm (GMT+8).

Distressed Hodlnaut customers are now looking onto the Singapore’s judicial system to recover their locked assets. In fact, most of the Hodlnaut customers are pushing for the company’s Btc and ETH assets to be liquidated, and the proceeds shared amongst themselves.

“Our legal representatives attended the first Case Conference for our Interim Judicial Management application on 18 August 2022. At this Case Conference, the Singapore Court has directed that subject to the Court’s availability, our application to be placed under Interim Judicial Management will tentatively be heard next Monday, 22 August 2022 at 2:30pm (GMT+8),” the company noted.

Hodlnaut Liquidity Crisis

Reportedly, the company’s liquidity crisis resulted from TerraUSD crash, unusually high volumes of withdrawals, and the overall decline in cryptocurrency prices. Worth noting, the company had approximately $234 million in assets under management as of April last year.

Around the same period, the company reported it had approximately 5,000 users. However, Bitcoin price had not attained its all-time high, together with most altcoins. Thereby implying more users must have deposited digital assets with Hodlnaut as of June this year.

 Notably, the company has noted that Celsius has neither borrowed nor lent to Hodlnaut. This is after revelation that Hodlnaut has an account with Celsius, although no deposits have been recorded.

Meanwhile, Hodlnaut users do not have a definite timeline on when their locked assets will be made available. 

According to the company, a definitive date will be announced by the appointed judicial officer.

Side Notes 

Several crypto lending companies have recorded major financial crisis in the past few months. A major contributor to their downfall wss the high APR, which has been described as far fetched. Moreover, traditional financial institutions offers way less than what most crypto firms offers. 

However, some crypto lending protocols may have registered improper use of customers funds, thereby causing their liquidity crisis. Increased regulations around the world is likely to reduce such cases in the future.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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