Crypto: Hodlnaut with $500m AUM halts withdrawals on the platform

Sahana Kiran
Source – Unsplash

A bad luck streak was upon the crypto-verse. From the collapse of Terra to an array of crypto lenders filing for bankruptcy after halting withdrawals, the bears were an added disadvantage. Now, just as the community was dealing with the downfall of crypto lenders like Three Arrows Capital and others, Hodlnaut a Singapore start-up released an announcement.

Earlier today, Hodlnaut penned a blog post revealing that withdrawals, token swaps as well as deposits were being suspended. This was scheduled to occur immediately. Similar to its counterparts, the platform blamed the recent market conditions for its decision.

Further elaborating on its latest move Hodlnaut said,

“We understand that this is disappointing news and understand its impact on you. We would like to reassure you that this difficult decision was taken for us to focus on stabilizing our liquidity and preserving assets, while we work to find the best way to protect our users’ long-term interests. We sincerely apologize for the inconvenience that this has caused you.”

It should be noted that Hodlnaut reportedly held more than $187 million in TerraUSD [UST] – now TerraClassicUSD [USTC]. Therefore, several speculate that its latest move could be in light of the dramatic downfall of Terra.

What are the next steps for this crypto lender?

Back in March this year, the platform garnered an in-principle approval from the Monetary Authority of Singapore [MAS]. However, in its latest blog post, Hodlnaut affirmed that it had withdrawn its license application. Therefore, the firm wouldn’t be categorized as a regulated digital payment token [DPT] service provider.

In addition to this, the platform noted that a recovery plan was underway. Hodlnaut is currently working with Damodara Ong LLC, a Singapore law firm on the execution, feasibility as well as timelines of the plan.

The MAS seemed to be busier than other regulators as several crypto platforms have crumbled down.