Hodlnaut – a crypto lending venue based in Singapore – has turned into the new platform to put a stop to deposits and withdrawals while referring to the lack of liquidity as well as the conditions that prevailed around the crypto market. The crypto lending forum made a formal declaration on the 8th of August, asserting that the conditions of the market have compelled the venue to close its services while it is dynamically operating on some recovery strategy.
Hodlnaut Dismisses Deposit and Withdrawal Services
Hodlnaut additionally mentioned that the firm has extracted its application for a regulatory license in Singapore and eventually it will not have the permission to provide any features related to token swaps. The formal declaration brought to the front that they are interacting with Damodara Ong in the case of feasibility as well as the timespan of their envisioned execution strategy along with the organization of the recovery plan while keeping in view the interests of the consumers.
The crypto lending institution disclosed to suspend the entirety of the social media accounts in its possession other than those operating on Telegram and Twitter. The crypto lending disaster originated from the crash of the Terra ecosystem after which Three Arrows Capital (a well-known crypto hedge fund) filed for bankruptcy. Then a continuous market downfall influenced the crypto lending institutions which had exposure to the Terra ecosystem and the hedge fund.
Also read:More and more Crypto Platforms Are Declining after Terra Collapse
Blockchain.com, Celsius, and Voyager Digital were a few prominent examples of the crypto lending companies that eliminated their services. Hodlnaut remains successful in avoiding any exposure to 3AC, however, a few reports have asserted that the platform did not provide transparent information regarding the investments made by it in the algorithmic stablecoin of Terra (that is now defunct).
A report was shared in June by a Twitter user going by the name “Fatman” pointing out Hodlnaut’s high exposure during the depeg of the stablecoin. Nonetheless, Zhu refuted such claims and declared that the company did not purchase UST and thus not suffered any subsequent losses related to the yield services of UST, however, no documentation was provided by him as evidence.
The seeming decline of Hodlnaut firm received harsh reactions from the community and several among them were suggesting the investors get their crypto stored off-exchange. The rest of them discussed the domino effect caused by the UST crash in May to be responsible for the after-effects taking place at the moment.
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