Crypto lender Hodlnaut lost close to $190 million in TerraUSD collapse
The Singapore-based crypto lender has lost close to $190 million, according to reports, due to its exposure to Terra’s algorithmic stablecoin UST.
The crypto lending platform had downplayed its exposure to Terra’s stablecoin UST despite suffering a heavy loss from the recent wipeout.
This report was found by interim judicial leaders, according to Bloomberg.
It is one of the first reports ever since the Singapore court granted Hodlnaut protection from creditors to give them time to work out a recovery plan.
The protection was granted in the month of August. Terra’s algorithmic stablecoin UST collapse has been one of the biggest and most talked about crypto accidents this year.
There are many reports that have mentioned many decisive losses and that some investors have even been driven to the point of committing suicide.
The reports have also stated that Hodlnaut converted some of its digital assets to UST sometime early this year.
It appears that the directors have downplayed the extent of the group’s exposure to Terra/Luna both in the period up to and after the Terra/Luna collapse in May 2022,” the report states.
Cryptolender has not maintained transparency for some time
According to reports, Hodlnaut has mishandled the facts. Data has revealed that the crypto lender had deleted more than 1,000 key documents, which could have been revealed before the exposure.
The legal leaders were unable to resolve the issues between the company’s subsidiary in Hong Kong and Hodlnaut Pte in Singapore. The Hong Kong subsidiary owes $58.3 million.
The lender suspended withdrawals, deposits and token swaps in August, citing the “difficult market conditions.”
Some of the employees have withdrawn assets worth more than $500,000 before indicating that they were aware of the problems at hand.
Hodlnaut’s directors sent a letter informing the Singapore Police Department of the digital assets that the digital assets have been converted to TerraUSD.
Much of TerraUST was given to Anchor Protocol, which is a decentralized finance platform (Defi) developed on the Terra blockchain.
Hidden documents
The lender had applied to the Singapore High Court to be placed under judicial management, as it would help the platform rehabilitate its business and prevent a forced liquidation of its assets.
The application for legal administration provides a moratorium (or temporary pause) against legal claims and proceedings against Hodlnaut. This break will give us breathing room to focus our efforts on the recovery plan to rehabilitate the company.
The legal managers have struggled to find several “key documents” in relation to the lender’s Hong Kong branch.
This division of Hodlnaut owes $82.43 million (Singapore dollars) to Hodlnaut Pte of Singapore. Most of the company’s investments in Defi were made through its Hong Kong division, according to the reports.
