Hodlnaut Lost $190M In Terra Ecosystem Crash: Report
- Singaporean cryptocurrency lending platform Hodlnaut lost $190 million due to the crash of the Terra stablecoin or UST (now USTC or Terra Classic USD.) after it converted some of its digital asset holdings to UST earlier this year.
- Some of the employees at the firm had successfully removed close to $500,000 from the platform a month earlier confirming the fact that they knew about the financial status of Hodlnaut.
- Hodlnaut has deleted over 1,000 “key” documents that could have proven to be of significant value against the firm’s practices and its exposure to the stablecoin.
Hodlnaut, a Singaporean cryptocurrency lending platform, was one of the many crypto firms that were affected by the collapse of the Terra ecosystem in May, and it was one of the major reasons why the firm had to file for Chapter 11 bankruptcy as the crypto market remains bearish and analysts believe that things might remain the same in the near future.
According to a report from Bloomberg, Hodlnaut has lost approximately $190 million after it converted some of its digital asset holdings to UST earlier this year. UST, now USTC, was a stablecoin that was the brainchild of Do Kwon, one of the most popular personalities in the crypto community that is now wanted by the Interpol and is currently hiding in an unknown location.
The collapse of the Terra ecosystem ended the chances of a price surge in 2022 and along with the crash of the UST stablecoin (now USTC or Terra Classic USD) and the LUNA (now LUNC or Terra Classic) tokens, the entire crypto space saw close to $40 billion wiped out in a couple of nights. There were plenty of crypto firms that were heavily invested in the Terra ecosystem and one of them was Hodlnaut, which has lost $190 million.
“It appears that the directors had downplayed the extent of the group’s exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022,”
the report reads.
The Terra ecosystem has been the cause of distruction for many crypto firms and as per the report, Hodlnaut has been trying to delete the evidence of any contact with Do Kwon’s failed ecosystem. Bloomberg’s data confirmed that the crypto lending platform operating out of Singapore has deleted over 1,000 “key” documents that could have proven to be of significant value against the firm’s practices and its exposure to the stablecoin.
It is crucial to note that in August, Hodlnaut confirmed that it would halting withdrawals and other activities on the platform due to extreme market conditions and that was the beginning of a strange turn of events. The “difficult decision” of halting withdrawals was taken to concentrate on stabilizing liquidity and safeguarding assets while Hodlnaut works on a long-term permanent solution.
Interestingly, it was also revealed that some of the employees atthe firm had successfully removed close to $500,000 from the platform a month earlier confirming the fact that they knew about the financial status of Hodlnaut.
In the light of similar events, Algorand Foundation, a nonprofit body that supports the Algorand blockchain, announced that it was exposed to Hodlnaut and the exposure was worth about $35 million. However, this amount represents around 3% of the firm’s total holdings.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
