Blaming market conditions and lack of liquidity, Singapore-based crypto lending platform Hodlnaut has become the latest firm to suspend withdrawals and deposits.
The crypto lending firm made an official announcement on Monday, claiming that market conditions have forced it to suspend its services and that it is actively working on recovery plans.
Dragi utilizatori, cu regret să vă informăm că vom opri imediat retragerile, schimburile de jetoane și depozitele din cauza condițiilor recente ale pieței. De asemenea, ne-am retras cererea de licență MAS. Iată declarația noastră completă https://t.co/5KfHUBzWsn Următoarea noastră actualizare va avea loc pe 19 august.
— Hodlnaut (@hodlnautdotcom) August 8, 2022
Hodlnaut also stated that it has withdrawn its regulatory license application in Singapore and as a result, would no longer be able to offer any token swaps features. The official announcement read:
„Lucrăm activ la planul de recuperare despre care sperăm să oferim actualizări și detalii cât mai curând posibil. Ne consultăm cu Damodara Ong LLC cu privire la fezabilitatea și termenele planului nostru de execuție preconizat și ne dezvoltăm o strategie de recuperare având în vedere interesul utilizatorilor noștri.”
The crypto lending platform said it would suspend all of its social media accounts except for the official Twitter and Telegram. Apart from the social media suspensions, founder Juntao Zhu has gone private on Twitter.
The crypto lending crisis began with the Terra (LUNA) — now renamed Terra Classic (LUNC) —ecosystem collapse urmată de bankruptcy of leading crypto hedge fund Three Arrow Capital (3AC). The back-to-back market turmoil created a domino effect for crypto lenders with exposure to the hedge fund as well as the Terra ecosystem. Voyager Digital, Celsius and Blockchain.com were some major crypto lenders that suspended their services.
Hodlnaut managed to avoid any 3AC exposure, but some reports have claimed that the firm was not transparent regarding its investments in Terra’s now defunct algorithmic stablecoin. A report published by Twitter handle Fatman in June pointed toward the large exposure of Hodlnaut during the stablecoin’s depeg and how they misrepresented their position:
They sold some UST as low as $0.40, degen shorted through bETH cross-margining, had huge, risky shorts on exchanges in the best case scenario, and in a hilarious move of brave defiance, they even re-entered Anchor after the collapse (small size). https://t.co/yfbTET4U4n (15 / 25)
— FatMan (@FatManTerra) 26 Iunie, 2022
Zhu has revendicat that the firm neither bought any UST nor incurred any losses on its UST yield services, but failed to offer any documentation as proof.
The apparent downfall of another crypto lending platform invoked furious reactions from the crypto community with many advocating for investors to store their crypto off-exchange. Others pointed toward the domino effect that the UST collapse created in May with effects being seen even now.
Another one bites the dust. Now that many of the largest players have gone under, which ones are next? If you still have assets with third parties, you should withdraw them to your own wallet ASAP. Not your keys, not your crypto. https://t.co/mY85yBhNbg
— Soldman Gachs ⌐◨-◨ (@DrSoldmanGachs) August 8, 2022
Source: https://cointelegraph.com/news/crypto-lending-platform-holdnaut-suspends-services-due-to-liquidity-crisis