Troubled Exchange Hodlnaut Announced 80% Staff Layoff
A cryptocurrency lending company based in Singapore called Hodlnaut has provided an update to the community regarding its judicial management filing and has also disclosed two alarming updates.
First, the platform announced that it would be laying off 80% of its workforce, which would amount to approximately 40 workers, “in order to lower the company’s spending.”
According to the statement made today, all of the remaining workers are “essential” for the business’s ongoing operations.
The second piece of news, which is arguably more concerning than the first, is that Hodlnaut is currently engaged in pending processes with the Attorney General of Singapore and the police force of Singapore. The lending platform for cryptocurrencies continued, “these actions are taken in what we believe to be in the best interests of our members.”
Hodlnaut has been temporarily shielded from any legal claims due to the company’s application for judicial management in Singapore, submitted one week ago. This would allow an impartial third party to monitor the company’s daily operations.
The most recent update underlined how the company’s decision to file for judicial management will improve the company and benefit the users “in the long run.”
Because of the application, the company wouldn’t have to sell off its Bitcoin and Ethereum holdings right now, which is advantageous given the present market conditions because prices are very low. After that, the next step for Hodlnaut is to work toward restoring the asset-to-debt ratio, which will eventually make it possible for the company to thaw its assets.
On August 8, Hodlnaut announced via Twitter that it would freeze withdrawals, deposits, and token swaps on the platform. The company stated in the tweet that
“this difficult decision was taken for us to focus on stabilizing our liquidity and preserving assets while we work to find the best way to protect our users’ long-term interests.”
Dear users, we regret to inform you that we will be halting withdrawals, token swaps and deposits immediately due to recent market conditions. We have also withdrawn our MAS licence application. Here is our full statement https://t.co/5KfHUBzWsn Our next update will be on 19 Aug.
— Hodlnaut (@hodlnautdotcom) August 8, 2022
Singapore at the Center of Many Troubled Crypto Exchanges
The city-state of Singapore has experienced a lively bear market due to the large number of lending companies and cryptocurrency funds that have ties to the country.
The cryptocurrency exchange Zipmex filed for protection under Singapore’s bankruptcy laws on July 22 to avoid further legal action from creditors following the blocking of withdrawals.
The authorities in Singapore are also keeping a close eye on Three Arrows Capital. This cryptocurrency hedge fund has since gone bankrupt and defaulted on its debts to other prominent cryptocurrency lenders.
In addition, the fund was given a reprimand by the Monetary Authority of Singapore (MAS)
“for supplying incorrect information to MAS and exceeding the assets under management (AUM) level allowed for a registered fund management company (RFMC).”
The Monetary Authority of Singapore (MAS) has been quite vocal about the need to set new guardrails for cryptocurrency users. This is to prevent additional freezes and platform problems better.