A further update was provided by the ailing cryptocurrency lender Hodlnaut after the company had previously frozen withdrawals on August 8. The lender subsequently stated that it is seeking regulatory administration in order to rehabilitate the startup. The most recent information indicates that Hodlnaut incurred a deficit of over $193 million, and this past week, the company discharged approximately 80% of the workforce that was employed by the startup.
“Financial Circumstances Are a Result of Losses Suffered by Hodlnaut’s Hong Kong Franchise During the Terrausd Crash,” Crypto Lender Said.
It would appear that Hodlnaut lost somewhere in the neighborhood of $200 million, and the organization is reportedly looking to the Singapore High Court for assistance and protection. According to an update on the judicial management procedure that was provided on August 19 by Hodlnaut, the company’s Hong Kong subsidiary was impacted negatively by the crash of the terrausd (UST). According to Hodlnaut, who made this statement at the time, the crash of terrausd (UST) caused “unusually huge numbers of withdrawals.”
Following the update was published, the whistleblower known as Fatman revealed that the court evidence that shows the shortage of $193 million also implies that Hodlnaut issued contradicting statements after the Terra accident. “In a new filing from Hodlnaut, they admit to [having] had the majority of their [assets under management] in UST through their HK defi spin-off entity, and they lost a staggering $190 million in the Terra crash,” Fatman said. “The filing comes as part of Hodlnaut’s ongoing investigation into the crash of the Terra cryptocurrency.” The leaker continued by saying:
Despite this, they continued to assure its clients that they were not exposed to any Anchor risk.
Hodlnaut is betting that the company’s Bitcoin and Ethereum will not be liquidated, but the lender does not yet have any creditors lined up.
If the company’s holdings are liquidated and sold, “this would mean that all users (whether you have deposited BTC, ETH or stablecoins) would likely only get back a fraction of what was initially sequestered,” the cryptocurrency lender explained. Hodlnaut intends that the summary judgment option will ask consumers the most and that it will “avoid dissolution of Hodlnaut’s holders of BTC and ETH at today’s depressed prices.”
We have listened to you and comprehend the fact that some of our customers have an immediate requirement to access their assets. As a result of this, we are also considering the possibility of enabling users to withdraw their initial investment, along with any and all interest that has been accrued, at a reduced price in order to end their account with Hodlnaut.
The Singapore court can hear the protection order case for the company today, and if the filing made by the startup is acceptable, the court will designate an interim judicial manager for the company. Hodlnaut intends to provide an update to the public on the situation on Tuesday, August 23, 2022, after the court proceeding takes place on Monday.
According to a post on the Hodlnaut blog, “The [company’s] founders are currently located in Singapore and working diligently on the recovery plan.” In addition, Hodlnaut stated that the company had no exposure to the troubled cryptocurrency lender Celsius, and according to Hodlnaut, the startup “does not have any secured creditors.” Hodlnaut also stated that the firm had no connection to any other creditors.