Blaming market conditions and insufficient liquidity, Singapore-based crypto lending platform Hodlnaut is just about the latest firm to suspend withdrawals and deposits.
The crypto finance company made the official announcement on Monday, claiming that market conditions have forced it to suspend its services which is positively focusing on recovery plans.
Dear users, we regret tell you that we’ll be halting withdrawals, token swaps and deposits immediately because of recent market conditions. We’ve also withdrawn our MAS licence application. Here’s our full statement https://t.co/5KfHUBzWsn Our next update is going to be on 19 August.
— Hodlnaut (@hodlnautdotcom) August 8, 2022
Hodlnaut also mentioned it has withdrawn its regulatory license application in Singapore and for that reason, would not be in a position to offer any token swaps features. The state announcement read:
“We are positively focusing on the recovery plan that people aspire to provide updates and information on when allowable. We’re talking to with Damodara Ong LLC around the practicality and timelines in our intended execution plan and therefore are strategizing our recovery plan with this users’ interests in mind.”
The crypto lending platform stated it might suspend all its social networking accounts aside from the state Twitter and Telegram. In addition to the social networking suspensions, founder Juntao Zhu went private on Twitter.
The crypto lending crisis started using the Terra (LUNA) — now renamed Terra Classic (LUNC) —ecosystem collapse adopted through the personal bankruptcy of leading crypto hedge fund Three Arrow Capital (3AC). The rear-to-back market turmoil produced a domino effect for crypto lenders with contact with the hedge fund along with the Terra ecosystem. Voyager Digital, Celsius and Blockchain.com were some major crypto lenders that suspended their professional services.
Hodlnaut were able to avoid any 3AC exposure, however, many reports have claimed the firm wasn’t transparent regarding its investments in Terra’s now defunct algorithmic stablecoin. A study printed by Twitter handle Fatman in June pointed toward the big exposure of Hodlnaut throughout the stablecoin’s depeg and just how they misrepresented their position:
They offered some UST as little as $.40, degen shorted through janet mix-margining, had huge, dangerous shorts on exchanges within the best situation scenario, as well as in a amusing move of brave defiance, they can re-joined Anchor following the collapse (small size). https://t.co/yfbTET4U4n (15/25)
— FatMan (@FatManTerra) June 26, 2022
Zhu has claimed that the firm neither bought any UST nor incurred any losses on its UST yield services, but unsuccessful to provide any documentation as proof.
The apparent downfall of some other crypto lending platform invoked furious reactions in the crypto community with lots of promoting for investors to keep their crypto off-exchange. Others pointed toward the domino effect the UST collapse produced in May with effects being seen even today.
A different one bites the dust. Now that lots of the biggest players go under, which of them are next? If you’ve still got assets with organizations, you need to withdraw these to your personal wallet As soon as possible. Not your keys, not your crypto. https://t.co/mY85yBhNbg
— Soldman Gachs ⌐◨-◨ (@DrSoldmanGachs) August 8, 2022
