The Singapore-based cryptocurrency lending venue Hodlnaut has become the new platform to put a stop to deposits and withdrawals. In doing so, the platform makes reference to the lack of liquidity as well as the conditions that have prevailed around the cryptocurrency market. On August 8th, a formal announcement was made by the crypto lending forum, stating that the current market conditions necessitated the closure of services while the forum dynamically operated on some recovery strategy.
Hodlnaut Withdrawal and Deposit Services
Hodlnaut also revealed the company has withdrawn its application for a regulatory license in Singapore, meaning it will be unable to offer token swap-related services in the future. The public announcement made clear that they are coordinating with Damodara Ong to determine whether or not their plans are feasible, how long it will take to implement those plans, and how they will structure a recovery strategy that will protect consumers’ best interests.
The cryptocurrency lending institution announced the suspension of all of its social media accounts except for Telegram and Twitter. Following the failure of the Terra ecosystem, well-known crypto hedge fund Three Arrows Capital declared bankruptcy, setting off a chain of events that led to the current crypto lending disaster. The Terra ecosystem and the hedge fund were both vulnerable to the market downturn that followed.
The collapse of Terra has had a devastating effect on the number of crypto platforms.
A number of prominent cryptocurrency lending platforms have discontinued their operations, including Blockchain.com, Celsius, and Voyager Digital. Despite the fact that Hodlnaut has thus far been able to avoid exposure to 3AC, there have been reports that the platform was not entirely forthright about its investments in Terra’s algorithmic stablecoin (that is now defunct).
During the depeg of the stablecoin in June, a Twitter user going by the name “Fatman” shared a report that highlighted Hodlnaut’s high exposure. Zhu denied the allegations and stated, without providing any supporting documentation, that the company had not purchased UST and had not incurred losses as a result of UST’s yield services.
The community reacted negatively to the Hodlnaut firm’s apparent decline, with some members recommending that investors move their cryptocurrency holdings off-exchange. They all agreed that the UST crash in May set off a chain reaction that is still having an impact today.