Crypto lender Hodlnaut unveils police proceedings and mass layoffs

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Finews.asia

19th August 2022 – (Singapore) Hodlnaut has disclosed that there are ongoing proceedings between the firm and the Singapore police, while also announcing mass layoffs at the troubled crypto lender.

Singapore-based Hodlnaut is facing «pending proceedings» that involve the city-state’s police and attorney-general, according to a statement, adding that it could not disclose any further information on the matter.

In addition, the firm also said it laid off about 40 people or approximately 80 percent of its workforce.

Earlier this week, Hodlnaut announced that it had filed an application for creditor protection in Singapore on 13th August, five days after it froze withdrawals, in an attempt to prevent forced liquidation of assets. Separately, the Monetary Authority of Singapore has already rescinded Hodlnaut’s in-principle approval to operate under the Payment Services Act.

Financial Health

In the statement, Hodlnaut shared some details about the run-up to its current situation including losses at its Hong Kong subsidiary during the TerraUSD stablecoin crash, unusually large withdrawals and «issues relating to certain user(s) who have deposited substantial amounts of cryptocurrency». 

Hodlnaut also underlined that it does not have any secured creditors and it did not borrow from or lend to fellow crypto lender Celsius Network which filed for bankruptcy in a US court last month. Hodlnaut has an account with Celsius but has not deposited any assets. 

Although the firm is cutting all open-term interest rates to 0 percent as of 22nd August to stabilise liquidity, it said it would restore its asset-to-debt ratio to at least 1 and eventually allow users to withdraw the full value of their crypto deposits.

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