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HomeLaw & PoliticsAlgorand Foundation details $35 million exposure of crypto lender Hodlnaut

Algorand Foundation details $35 million exposure of crypto lender Hodlnaut

The popular proof-of-stake blockchain Algorand’s development organisation, the Algorand Foundation, has disclosed that Hodlnaut, troubled Singapore-based crypto lending company, has a $35 million gap or hole on its financial sheet. On September 9, the Algorand Foundation published the statement on its website, announcing that it was “pursuing all legal remedies to maximise asset recovery.”

The Algorand Foundation acknowledged having exposure to Hodlnaut in a discussion on Twitter last week after the latter ceased withdrawals from its platform on August 8, 2022 due to liquidity problems, which led to the crypto lending company being placed under Interim Judicial Management.

The Algorand Foundation stated in a blog post:

“These funds were surplus to day-to-day requirements and represent less than 3% of the Foundation’s assets, and we do not anticipate operational or liquidity issues due to this action.” 

The proof-of-stake blockchain Algorand introduced a new version that intends to increase the chain’s transaction per second (TPS) and enhance cross-chain connectivity, as per a recent blog post. The improvement would result in a five-fold boost in the blockchain’s overall performance.

Hodlnaut was one of several crypto businesses that crumbled under the crypto winter. Five days after it halted withdrawals, on August 13, it presented its request to be put under judicial control.

 A firm manages the operations, real estate, and assets of a struggling company under judicial management, a type of debt restructuring. The business is shielded from third-party legal actions during the procedure.

In order to produce income for the growth of the Algorand ecosystem, Algorand claims it invests a portion of its excess treasury capital. The majority of the investment is made up of locked, short-term deposits that are no longer accessible since Hodlnaut’s withdrawal ban made them unavailable.

Algorand declared that it was seeking all available legal options to increase asset recovery.

Read more at Cryptoshrypto:

Crypto lender Hodlnaut placed under IJM by Singapore High Court

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