- Law firm Damodara Ong is now working with Hodlnaut on a recovery plan
- The platform’s next update is scheduled on August 19 — two weeks from now
Crypto lender Hodlnaut has frozen withdrawals, token swaps and deposits on its platform, in addition to withdrawing a license application with the Monetary Authority of Singapore (MAS).
Its withdrawal freeze was made to stabilize liquidity and preserve assets, the Singapore-based platform said in a statement Monday.
“Hodlnaut is therefore no longer providing regulated digital payment token (DPT) services, … our token swap feature,” the firm said in its statement.
Cryptocurrency businesses in Singapore are required to register with the MAS to be granted permission to offer services. That’s why Hodlnaut is unable to support token swaps, a regulated business that facilitates crypto-to-crypto trading.
Hodlnaut is one of several crypto businesses in the lending space to have crumbled amid the market downturn triggered by TerraUSD’s crash and the subsequent collapse of Three Arrows Capital. Tech in Asia reported Hodlnaut may have had a $187 million exposure to TerraUSD.
The firm said it’s engaging with Singapore-based law firm Damodara Ong on a recovery plan and expects to next provide an update on August 19. For now, it plans to continue paying interest to customers in order to minimize liabilities.
Hodlnaut last advertised up to 7.25% annual percentage yield on various cryptocurrencies, with its highest rates offered on stablecoins USD coin and tether. Users can now only view their balances, according to a blog post.
“We apologise that we are unable to facilitate any withdrawal of funds at this juncture. We believe that this will provide us with the necessary breathing room to explore potential restructuring options and recovery plans with our legal advisors,” wrote Hodlnaut.
Although, rarely have crypto lenders like Hodlnaut returned to full functionality quickly. Voyager and Celsius users are still locked out of their accounts more than one month after their respectively platforms shut down.
Both matters are now playing out in bankruptcy courts.
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