Hodlnaut, a Singapore-based cryptocurrency lending platform and borrowing platform Hodlnaut, announced Monday that it had suspended customer withdraws, swaps and deposits. The firm cited “difficult market conditions” as the reason that triggered the move.
The application of the crypto lender for a license by the Monetary Authority of Singapore was also withdrawn.MAS) to offer digital token payment services. In March, Hodlnaut was granted in-principle approval by the Central Bank.
The Singapore-based company said it wanted to keep liquidity stable and preserve customer assets while looking for a long-term solution.
Hodlnaut said it is in talks with Damodara Ong LLC, a Singapore law firm, to develop a recovery plan.
According to the firm, “Halting withdrawals and token swaps was a necessary step to stabilize our liquidity. It also gave us the opportunity to work closely alongside our legal advisors to devise the best restructuring and recovery plan for our customers.”
Hodlnaut stated that it was restricting certain channels and would close down social media accounts.
The company has yet to remove its YouTube channel or CEO. Juntao Zhu, co-founder, has made his twitter account private.
The company’s team page (on Hodlnaut’s website), which previously mentioned its two founders, five employees, and an advisor, has also been pulled down.
According to the firm, it will release additional updates on August 19.
According to LinkedIn, Hodlnaut was founded in 2019 and manages assets in excess of $500 million.
Are Customer Funds Secure?
Hodlnaut is the latest crypto lender to halt customer withdrawals. They cited financial problems triggered by market volatility.
In the past two months, companies such as Celsius Networks, Three Arrows Capital, Voyager Digital, Vauld, and CoinFlex, among others, suspended withdrawals or declared bankruptcy.
Although crypto prices have declined for the majority of 2018, May and June were terrible months.
The past two months have been Bitcoin prices The market plunged to unimaginable levels, while lending companies and exchanges were forced to take actions that no one had anticipated.
Customers were left uncertain if their hard-earned money would be withdrawn again after companies stopped withholding withdrawals.
Some of these companies have reopened withdrawals while others offer only hope without making concrete promises. The worst is possible.
Earlier last month, Sam Bankman-Fried, the founder of FTX exchange, stated that he was pouring hundreds of millions of dollars into struggling firms to keep them afloat but said there are others that he believes are already “secretly insolvent.”
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