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$193 million, 80% layoffs, Anchor, BTC, Celsius, Court, creditors, Cryptolender, ETH, Fatman, Freeze Withdrawals, Hodlnaut, court management, Singapore Court, Stablecoins, terrausd (UST) crash, UST, whistleblower, Withdrawal
Hodlnaut Court Filing Highlights $193M Shortfall, Whistleblower Condemns Cryptolender’s Contradictory Statements – Bitcoin News
Troubled crypto lender Hodlnaut shared another update after the company froze withdrawals on August 8, then revealed that the company is seeking legal guidance to rehabilitate the startup. The latest update shows that Hodlnaut was experiencing a shortfall of around $193 million, and in the past week the company has laid off roughly 80% of the startup’s workforce.
Crypto Lender Says “Financial Circumstances Resulting from Losses Suffered by Hodlnaut’s Hong Kong Subsidiary During Terrausd Crash”
It appears that Hodlnaut lost close to $200 million and the company is now seeking assistance and protection from the Singapore High Court. In a legal management process update published on August 19, Hodlnaut says the company’s Hong Kong subsidiary suffered from the terrausd (UST) crash. At the time, Hodlnaut claims that the terrausd (UST) crash triggered “unusually high withdrawal volumes.”
After the update was published, the whistleblower Fatman explained that the court filing showing the $193 million deficit also indicates contradictory statements Hodlnaut published after Terra crash. “In a new file from Hodlnaut, they admit it [having] had most of theirs [assets under management] in UST through their HK defi spin-off entity, and they lost a whopping $190 million in the Terra crash, Fatman said. The whistleblower added:
Despite this, they continued to tell customers that they had zero Anchor exposure.
Hodlnaut hopes the company’s Bitcoin and Ethereum will not be liquidated, the lender has not secured any creditors
Hodlnaut hopes the legal governance option will help customers the most, and it will “avoid the liquidation of Hodlnaut’s holdings of BTC and ETH at today’s low prices.” If the company’s holdings are liquidated and sold, “this would mean that all users (whether you have deposited BTC, ETH or stablecoins) will likely only get back a fraction of what was originally deposited.” The crypto lender continued:
We have heard you and understand that some of our users have an urgent need to access their money. As such, we are also investigating the possibility of allowing users to withdraw their first deposit, with accrued interest, at a discounted amount and close their account with Hodlnaut.
The company’s receivership case will be heard today by the Singapore court, and if the startup’s filing is successful, an interim receiver will be appointed by the court. After the court proceedings on Monday, Hodlnaut plans to update the public on Tuesday, August 23, 2022.
“The [company’s] the founders are in Singapore working hard on the recovery plan,” explains Hodlnaut’s blog post. Additionally, Hodlnaut said the company had no exposure to embattled crypto lender Celsius, and when it comes to securing creditors, Hodlnaut says the startup “has no secured creditors.”
What do you think of Hodlnaut’s latest update? Let us know what you think about this topic in the comments section below.
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