Hodlnaut, the troubled crypto lender, shared another update on the situation after it stopped withdrawing funds from August 8. Then the company revealed that they are seeking judicial supervision to help them rehabilitate their startup. The latest update shows that Hodlnaut experienced a shortfall of around $193 million and this past week the company has laid off roughly 80% of the startup’s workforce.
Crypto Lender Says ‘Financial Circumstances Are a Result of Losses Suffered by Hodlnaut’s Hong Kong Subsidiary During the Terrausd Crash’
Hodlnaut appears to have lost nearly $200 million. The company now seeks protection and assistance from the Singapore High Court. In a judicial management process update published on August 19, Hodlnaut says the company’s Hong Kong subsidiary suffered from the terrausd (UST) crash. At the time, Hodlnaut claims the terrausd (UST) crash sparked “unusually high volumes of withdrawals.”
The update was posted and the whistleblower Fatman received it. explainedThat’s what the $193,000,000 shortfall was also indicated by the court affidavit. contradictory statementsHodlnaut publishes after Terra’s crash. “In a new filing from Hodlnaut, they admit to [having]Most of them had [assets under management] in UST through their HK defi spin-off entity, and they lost a whopping $190m in the Terra crash,” Fatman said. Fatman added that the whistleblower had also said:
They continued to claim that they did not have any Anchor exposure despite this.
Hodlnaut Hopes the Company’s Bitcoin and Ethereum Will Not Get Liquidated, Lender Has Not Secured Any Creditors
Hodlnaut hopes the judicial management option will help customers the most and it would “avoid liquidation of Hodlnaut’s holdings of BTC and ETH at today’s depressed prices.” If the company’s holdings are liquidated and sold, “this would mean that all users (whether you have deposited BTC, ETH or stablecoins) would likely only get back a fraction of what was initially deposited.” The crypto lender continued:
Thank you for your feedback. We understand the urgency of some users to have access to their funds. Hodlnaut is exploring the possibility of users being able to withdraw their initial deposit and all accrued interest at a discount amount.
The company’s judicial management case will be heard today by the Singapore court and if the startup’s filing is successful, an interim judicial manager will be appointed by the court. Hodlnaut will update the public Tuesday, August 23rd 2022, following the Monday court proceedings.
“The [company’s] founders are in Singapore and working hard on the recovery plan,” Hodlnaut’s blog post explains. Additionally, Hodlnaut said the company had no exposure to the embattled crypto lender Celsius and as far as securing any creditors, Hodlnaut says the startup does “not have any secured creditors.”
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