Cryptolender Hodlnaut cuts staff, names end withdrawals

Crypto exchanges and lenders are still struggling to “hold on” to their employees. As companies struggle to stay afloat after the latest crypto crash, hundreds of exchange staff are being kicked to the curb, and some are reportedly trying to keep this a secret.

Relatively small crypto lender Hodlnaut, which boasts more than 10,000 active users and $250 million in assets on its platform, has been hit harder than most. On Friday, the company announced they had laid off 80% of employees, corresponding to approx. 40 employees. The Singapore-based company had stopped withdrawal August 8, and at the same time withdrew its application to the home country’s financial authorities to approve digital currency payments, according to a report from Washington Post. Hodlnaut’s services allow users to earn interest of up to 7.25% on their crypto stored on the platform.

Earlier this year, Hodlnaut released TerraUSD (UST) and Terra (LUNA) coins on its platform, which seems to have turned out to be a big mistake when the price of both coins crashed back in May, taking the price of other cryptocurrencies with it. At that time, Hodlnaut publicly delisted both cryptocurrencies. When it announced it was halting withdrawals, it said it was focusing on “stabilizing our liquidity and preserving assets.”

Users have requested that the crypto-lending company refund users for their money, but the company was less than forthcoming on details of how and if that would happen.

But working with a skeleton crew may be the least of the company’s worries. The company said it had filed for receivership, a form of creditor protection for its company as it navigates these market-based woes. It will also protect the company against any legal claims. At the same time, they revealed that they were being investigated by the Singapore police. Especially when you answer the question of whether there were proceedings between the company and the police, the company wrote:

“Yes, there is pending litigation between Hodlnaut and the Singapore Attorney General/Singapore Police Force. Although Hodlnaut is unable to disclose any information in this regard, these actions are being taken in what we believe is in the best interest of our users.”

Although 40 employees doesn’t seem like a lot in the grand scheme of crypto layoffs. The Verge first reported Thursday based on anonymous internal sources that Crypto.com had laid off hundreds more than the 260 it had previously said it was ambitious “to ensure continued and sustainable growth in the long term”, according to the exchange’s managing director Kris Marszalek. Though apparently several hundred employees were cut, and Marszalek wouldn’t even tell current employees how many at a recent town hall meeting, according to documents allegedly seen by The Verge.

Unidentified employees told The Verge that they noticed employees disappearing from the internal slack or from scheduled meetings. The company had strengthened its staff by 50% after the price of crypto peaked in 2021, something behind the scenes of 1,300 additional employees, according to the anonymous sources.

Victoria Davis, Crypto.com’s chief communications officer, told Gizmodo in an email: “We announced reductions in June and since then have optimized our workforce to adapt to current external economic headwinds. We have a strong balance sheet and will continue to invest in product, engineering and brand partnerships going forward.”

Although Crypto.com had become a major public face of the cryptosphere thanks to Superbowl ads with everyone’s favorite Bostonian Matt Damon and buying out the name to LA Staples Center.

Although the prices of the most popular digital currencies have decreased since last spring, and several exchanges have experienced a cash crisis. Some, like Hodlnaut, have gone so far as to restrict users from withdraw funds.