The troubled crypto lender Hodlnaut shared another update after the company froze withdrawals on August 8, and then revealed the company is seeking judicial management in order to rehabilitate the startup. The latest update shows that Hodlnaut experienced a shortfall of around $193 million and this past week the company has laid off roughly 80% of the startup’s workforce.
Crypto Lender Says ‘Financial Circumstances Are a Result of Losses Suffered by Hodlnaut’s Hong Kong Subsidiary During the Terrausd Crash’
It seems that Hodlnaut lost close to $200 million and the company is now looking for assistance and protection from the Singapore High Court. In a judicial management process update published on August 19, Hodlnaut says the company’s Hong Kong subsidiary suffered from the terrausd (UST) crash. At the time, Hodlnaut claims the terrausd (UST) crash sparked “unusually high volumes of withdrawals.”
After the update was published, the whistleblower Fatman explained that the court affidavit that shows the $193 million shortfall also indicates contradictory statements Hodlnaut published after the Terra crash. “In a new filing from Hodlnaut, they admit to [having] had most of their [assets under management] in UST through their HK defi spin-off entity, and they lost a whopping $190m in the Terra crash,” Fatman said. The whistleblower added:
Despite this, they continued to tell customers they had zero Anchor exposure.
Hodlnaut Hopes the Company’s Bitcoin and Ethereum Will Not Get Liquidated, Lender Has Not Secured Any Creditors
Hodlnaut hopes the judicial management option will help customers the most and it would “avoid liquidation of Hodlnaut’s holdings of BTC and ETH at today’s depressed prices.” If the company’s holdings are liquidated and sold, “this would mean that all users (whether you have deposited BTC, ETH or stablecoins) would likely only get back a fraction of what was initially deposited.” The crypto lender continued:
We have heard you and understand that some of our users urgently need to access their funds. As such, we are also exploring the option of allowing users to withdraw their initial deposit, with interest accrued in full, at a discounted amount and close their account with Hodlnaut.
The company’s judicial management case will be heard today by the Singapore court and if the startup’s filing is successful, an interim judicial manager will be appointed by the court. Following the court process on Monday, Hodlnaut plans to update the public on Tuesday, August 23, 2022.
“The [company’s] founders are in Singapore and working hard on the recovery plan,” Hodlnaut’s blog post explains. Additionally, Hodlnaut said the company had no exposure to the embattled crypto lender Celsius and as far as securing any creditors, Hodlnaut says the startup does “not have any secured creditors.”
What do you think about Hodlnaut’s latest update? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
