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Singapore based Crypto lender Hodlnaut facing police charges and laid off majority of employees

As per a blog post of August 19, Holdnaut, a Singapore based struggling crypto lender has revealed that the company is facing police charges and has laid off the majority of its employees. The company is involved in pending processes with the Singapore Attorney-General and the Singapore Police Department.

The financial struggle of Hodlnaut

The startup is facing a major financial struggle. Earlier this month, Hodlnaut halted withdrawals and then sought creditor protection in Singapore, citing a need for more time to fix its liquidity concerns. According to the startup, it was hampered by losses at its Hong Kong affiliate following the TerraUSD stablecoin crisis. It also mentioned abnormally high amounts of drawings, the global downturn in crypto values from their 2021 peaks, and matters related to some specific user(s) who have placed vast quantities of crypto with Hodlnaut.

Measures taken by the company

Hodlnaut has taken drastic measures to save expenditures. According to the blog post, the business has fired off about 80% of its workforce (40 people) keeping the required manpower for us to carry out important duties, since ceasing withdrawals. Hodlnaut also announced that it will reduce all open-term interest rates to 0% as of 5 PM on Aug. 22 in order to stabilize liquidity.

According to the firm, its founders are in Singapore actively working on the recovery strategy. Hodlnaut said earlier this week that the company has filed an appeal in Singapore for creditor protection. Hodlnaut said that it did not have any secured creditors. However, Hodlnaut hopes to improve its asset-to-debt proportion to at minimum one and let customers start taking out the entire value of their crypto investments. 

Terra crash impact

This year’s crypto crash resulted in a series of meltdowns involving digital-asset exchanges, lenders, and hedge funds. Some of these, such as Hodlnaut, have made their way to Singapore. The startup is also among several crypto lenders that have blocked client funds in the aftermath of its collapse earlier this year of Terra. Vauld, situated in Singapore, is in a similar scenario, as is South Asian cryptocurrency exchange Zipmex.

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