Hodlnaut has become the latest cryptocurrency lending firm to succumb to the stiff effect of the recent crypto winter. In an announcement on Monday, the Singapore-based company said it’s suspending all services immediately “due to the recent market conditions.”
All withdrawals, deposits, and token swaps, including borrowing and lending, have been suspended. Hodlnaut said the decision was made to enable the company to stabilize liquidity and preserve assets while they work on the “best way to protect our users’ long-term interests.”
Hodlnaut withdraws its license
Hodlnaut said it has already informed the country’s financial regulator, the Monetary Authority of Singapore (MAS), about the development and also filed to revoke the company’s operating license. As such, the company ceases to provide regulated digital payment services.
The firm contracted Damodara Ong LLC to facilitate the recovery plan. Hodlnaut accounts for about $500 Million in digital assets under management, according to Crunchbase.
We are immensely grateful to all of our users, past or present, for your continued support over these 3 years. We wish that the situation was different.Hodlnaut.
Why is Hodlnaut shutting down?
Besides the operation stress emanating from the recent bear market pressure, reports claim that the company was also affected by Terra’s debacle in May. Hodlnaut reportedly lost about $187 million in Terra’s algorithmic stablecoin, UST. The stablecoin collapsed by over 99%, wiping away over $40 billion in market cap.
Several other crypto companies and venture capital firms reported losses from the Terra incident. Early this month, the CEO of a South Korean crypto VC firm, Hashed, disclosed that the company lost out on a $3.6 billion return with its Terra investment. Terra’s crash stirred a negative ripple effect that worsened the bear market, depleting the overall market cap to below $1 trillion.
Crypto lenders were seemingly at the receiving end of the market winter, as some of the major ones like Celsius and Voyager Digital have filed for bankruptcy.