Hodlnaut, a cryptocurrency lender based in Singapore, has suspended withdrawals due to difficult market conditions.
On Monday, the cryptocurrency lending & borrowing platform Hodlnaut, which is based in Singapore, made the announcement that it has temporarily halted client withdrawals, exchanges, and deposits. The company stated that the move was prompted by “challenging market conditions” as the rationale for the action.
The cryptocurrency lender also withdrew its application to the Monetary Authority of Singapore (MAS) for a license to provide digital token payment services, which it had previously submitted. In March, Hodlnaut was granted approval from the Central Bank based on its general principles.
The business, with its headquarters in Singapore, stated that it intends to prioritize maintaining stable liquidity and protecting customer assets while continuing to work on a more permanent solution.
Hodlnaut has indicated that it is developing a recovery strategy in collaboration with the Singapore legal firm Damodara Ong LLC.
“Halting withdrawals and token swaps was a necessary step for us to take in order to stabilize our liquidity and give us the time to work closely with our legal advisors in order to come up with the best possible restructuring and recovery plan for our users,” the company said in a statement. “We apologize for any inconvenience this may cause.”
Hodlnaut also mentioned that it is closing down its social media accounts and would be restricting access to several of its official channels, which it previously had.
To this point, the company has taken down its YouTube channel and fired its CEO. Additionally, co-founder Juntao Zhu has made his Twitter account private.
In the past, Hodlnaut’s website featured a team page that introduced visitors to the company’s two founders, five employees, and an advisor; however, this page has since been removed.
The company has indicated that it would distribute additional updates on August 19th.
According to the LinkedIn profile of the company, Hodlnaut, which was founded in 2019, is responsible for the management of assets worth more than $500 million.
Are Customer Funds Safe?
As a result of this move, Hodlnaut joins a lengthy list of other cryptocurrency lenders that have lately halted customer withdrawals, citing financial difficulties caused by the current extreme market volatility.
During the past two months, a number of cryptocurrency-related businesses, including Celsius Networks, Three Arrows Capital, Voyager Digital, Vauld, and CoinFlex, amongst others, have either ceased processing withdrawals or filed for bankruptcy.
Even though cryptocurrency prices have been on a downward trend for the most part of this year, the months of May and June were terrible for the cryptocurrency market.
In the past two months, the price of Bitcoin has dropped to levels that have not been seen since the year 2020, while at the same time, exchanges and lending companies have been compelled to do things that nobody expected them to do.
Customers were left wondering about whether or not they would ever see the money they had worked so hard to earn again when one business after another suspended withdrawals.
While a few of these businesses have started making withdrawals again, others have just offered words of hope without making any concrete commitments. This indicates that the worst may yet be yet to come.
Sam Bankman-Fried, the founder of FTX exchange, revealed earlier this month that he was investing hundreds of millions of dollars into struggling organizations in order to keep them afloat. However, he also stated that he believes there are other companies that are already “secretly insolvent.”
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