Hodlnaut, a crypto lending platform based in Singapore, has been the latest company to stop withdrawals and deposits.
On Monday, the crypto lending company made an official announcement stating that market conditions had forced it to suspend services and that it was actively working towards recovery plans.
We regret to inform our users that withdrawals, token swaps, and deposits will be stopped immediately because of recent market conditions. Our MAS license application has been withdrawn. Here is our full statement https://t.co/5KfHUBzWsn Our next update will be on 19 Aug.
— Hodlnaut (@hodlnautdotcom)
August 8, 2022
Hodlnaut also announced that it had withdrawn its Singapore regulatory license application and would not be able offer token swaps features. Official announcement:
“We are currently working on the recovery plan and will provide updates as soon as possible. We are currently consulting Damodara Ong LLC about the feasibility and timelines for our planned execution plan. We also plan to strategize our recovery plan keeping our users’ best interests at heart.
The crypto lending platform announced that it would suspend all social media accounts, except Telegram and Twitter. Juntao Zhu, the founder of crypto lending platform, has made Twitter private.
The crypto lending crisis started with the Terra, now renamed Terra Classic. This was followed by the bankruptcy at the leading crypto hedge fundThree Arrow Capital (3AC). Back-to-back market turmoil caused a domino effect on crypto lenders who were exposed to the Terra ecosystem and the hedge fund. Voyager Digital and Celsius were three of the major crypto lenders who had to suspend their services.
Hodlnaut was able to avoid 3AC exposure. However, some reports claim that they were not transparent about their investments in Terra’s now-defunct algorithmic stabilitycoin. Fatman published a report in June that pointed to the large exposure Hodlnaut received during the stablecoin’s depeg, and how they misrepresented themselves.
They sold some UST as low at $0.40, degen had large, risky shorts on the exchanges through bETH cross margining, and in a funny move of brave defiance they even re-entered Anchor following the collapse (small size). https://t.co/yfbTET4U4n (15/25)
— FatMan (@FatManTerra).
June 26, 2022
Zhu claimed the firm did not buy any UST or incur losses on its UST yield service, but failed to provide any documentation.
Many crypto enthusiasts urged investors to keep their crypto off-exchange after the apparent collapse of another crypto lending platform. Others pointed out the domino effect the UST collapse had on May, with its effects still being felt.
Another one is left behind. What about the remaining players? You should immediately withdraw assets that you have with third parties. Your keys are not your crypto. https://t.co/mY85yBhNbg
— Soldman Gachs #-# (@DrSoldmanGachs)
August 8, 2022