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In a blog post published on Friday, Singaporean crypto lender Hodlnaut revealed significant layoffs and ongoing "police proceedings," underscoring the precarious financial and legal predicament of the most recent company to suspend cryptocurrency withdrawals.
Hodlnaut said in the blog that in an effort to "stabilize our liquidity" and reduce costs, it let go 40 employees (or 80% of the workforce) and lowered interest rates to 0% APR. The company's founders are still in Singapore and are "working hard on a recovery strategy."
The cryptocurrency swap shop that pays interest claimed to be in "proceedings" with Singaporean authorities. Its blog kept quiet about the specifics but stated that the actions were taken to benefit users. Early in August, Hodlnaut froze the assets of those users; it is now looking for protection from its creditors.
Along with Three Arrows Capital, Voyager Digital, and Celsius Network, Hodlnaut is one of numerous cryptocurrency businesses that have failed due to depreciating market circumstances and collapsing businesses. Hodlnaut blamed "losses experienced" from the crash of TerraUSD in the blog post.
On August 22, 2022, a Singapore court will hear Hodlnaut's request for legal protection. The company's current directors may be replaced by an interim judicial manager who will be in charge of managing the company's finances.
