Scary Friday has prepared a couple of unpleasant surprises for many, and the already nearly insolvent Hodlnaut has to tighten its grip in order to survive yet another crypto bloodbath. Just a few days ago, the Singaporean crypto company had to file for creditor protection. The judicial management might be the only choice for the crypto platform that has halted all transactions since the 8th of August.
The Bigger Part of the Workers are Gone With The Wind
Despite most crypto companies cutting off around 10-30% percent of their staff during ‘volatile market conditions’, Hodlnaut had to enforce a dramatic change – 80% of the staff were laid off today. This move comes just 10 days after the suspension of all deposits and withdrawals. Moreover, the protection from creditors by the judicial management was supposed to prevent the forced liquidation of the company’s assets.
JUST IN: #Crypto lender Hodlnaut lays off 80% of its staff and reveals they're under investigation by the Singapore police.Moreover, Hodlnaut posted a message on their official blog, thanking the users for their patience. The company representatives also emphasized that the rest of the workers that are left on the team will “play a vital role in reviving the company”. According to the blog post, the most damage has been done in Hodlnaut’s Hong Kong subsidiary.— Watcher.Guru (@WatcherGuru) August 19, 2022
As the story goes, there were $187 million in the subsidiary which were allocated to the infamous Terra (LUNA) and Terra (UST). When Terra (LUNA) and its algorithmic stablecoin crumpled to pieces in May, Hodlnaut suffered an unexpectedly big loss, heavily shaking the ecosystem of the crypto trading platform.
Dear users, we would like to update that our lawyers have attended the 1st Case Conference for the IJM application on 18 Aug. We have made the JM application docs available to our users for download. Here is our full statement: https://t.co/WRVhDGzvXX Our next update is on 23 Aug pic.twitter.com/3G7YBWqHmEHodlnaut Might Resume Withdrawals— Hodlnaut (@hodlnautdotcom) August 19, 2022
Over and beyond that, there might be some good news for users of the cloistered crypto platform. Hodlnaut disclosed that they’re “exploring withdrawal options”, meaning that at some point the customers will be able to withdraw their funds, but most likely with zero interest rate. This is confirmed by the founders of Hodlnaut, who said that “In order to further stabilize our liquidity, we will be taking steps to reduce our burn rates. We will therefore be changing all open term interest rates to 0% APR from 22 August, 5 pm (GMT+8).”
While there’s still pending litigation with Singapore Police Force, the company is attempting to carry out its revival plan. As the Singaporean company didn’t go for a complete moratorium like Vauld, but rather for judicial management, there’s a chance to get things in order.
On the Flipside
- Despite rumors on social media, Hodlnaut didn’t have any assets on Celsius, another bankrupt crypto platform. This was repeatedly confirmed in the official blog message.
Why You Should Care
The court proceedings of this case might have a huge impact on the crypto industry, as there are at least 5 companies going through similar legal processes.
Learn more about Hodlnaut’s judicial management process
Read about Celsius’ filing for bankruptcy protection
Find out what happened to the founders of Three Arrows Capital