Hodlnaut, a Cryptocurrency lender and borrower firm in Singapore, has recently freezes all the primary activities on their application like deposits, swaps, and withdrawals. The reason is the cryptocurrency market’s ongoing crisis.
The cryptocurrency lender, Hodlnaut added that they would withdraw their application for a license to offer digital token payment services from MAS (Monetary Authority of Singapore). It had made the application early this year and had got approval in March.
Hodlnaut, A Singapore-Based Crypto Lender, Freezes Its Withdrawals
Digital payment token service companies licensed by MAS are regulated for terrorism financing risk, technology risk, and money laundering risks. They are not subject to liquidity requirements or risk-based money. Also, such companies don’t need to safeguard the customer money or cryptocurrency like digital tokens from any risk.
Hodlnaut has taken all the steps due to the recent cryptocurrency market conditions. Also, they mentioned that they would focus more on preserving the assets and liquidity. Like other crypto lenders, the company faces difficulty running its operations after the TerraUSD and Luna collapsed in May 2022.
Several high-profile companies like Celsius and Three Arrows Captial have recently filed for bankruptcy. Hodlnaut is one of the institutional clients as per the court filing. Several other firms from Singapore – one of the largest hubs for crypto companies, are running into several operational difficulties.
Vauld, another Singapore-based crypto trading platform, suspended the withdrawals in July, and later, Zipmex, the largest cryptocurrency exchange focusing on the South East Asian market, also disabled the withdrawal.
As per the media companies like Crunchbase, Hodlnaut has assets worth nearly 500 million USD under their management. The company is currently working with its legal form to build a strategy and will inform its customers by August 19th.
Hodlnaut stated, “ It was difficult to focus on stabilizing liquidity and preserving assets while we work to discover the best possible ways to protect the users’ long-term interests. They also said, “We are constantly working on the recovery plan and would provide the updates as soon as possible.”
It is quite unlikely that Crypto lenders such as Hodlnaut would return as a fully functional application in less time. Celsius and Voyager’s user funds are frozen for more than a month after the platforms filed for bankruptcy and shut down.
The Fate Of Hodlnaut Customers
Recent announcements said they need to create a strategy to reclaim stakeholders’ monies. Since withdrawals are banned, users should not make deposits because they won’t be credited.
Many customers have taken to social media channels to express their mistake of using the DeFi platforms.
Hodlnaut took a long to be Safe.
On July 18, there was a report published by TechninAsia, that talked about the potential exposure to the Terra collapse. It was found that two wallets on Hodlnaut were used to move a huge amount of UST tokens to Terra’s protocol before it collapsed.