Hodlnaut Is The Latest Crypto Lending Platform To Freeze Customers Funds

Hodlnaut, a cryptocurrency lending platform has announced that it is suspending withdrawals. The company made the revelation via a tweet on Monday, August 8.

According to the update, the company said that the suspension became inevitable due to “market conditions”. Hodlnaut added that it would be updating its customers on the next line of action bu August 19.

An alert on the de-fi platform’s website says:

“Withdrawals, token swaps and deposits are halted.”

The release from the company said that it is also withdrawing its application for a regulatory license from MAS. The post says:

“Dear users, we regret to inform you that we will be halting withdrawals, token swaps and deposits immediately due to recent market conditions. We have also withdrawn our MAS license application.”

Company Says Move To Stabilize Liquidity

A press release addressed to its customers says that the company reached “this difficult decision” due the current market conditions, adding that the move would enable the company to stabilize their liquidity. The release said that the effort would also enable Hodlnaut to map out a strategy to protect its customers’ long-term interest.

No Longer A Provider

The release stated the consequence of the withdrawal of the company’s application for a license from Singaporean regulatory authorities:

“Hodlnaut is therefore no longer providing regulated digital payment token (DPT) services, ie our token swap feature. For the avoidance of doubt, Hodlnaut will also cease all borrowing and lending services.”

It added that it is working with a consultant, Damodara Ong LLC, on a recovery plan. Some of the highlighted answers that investors are asking is that the company is not certain when it would resume operation and have customers withdraw their funds.

A String of Closures

With the drop in the value of cryptocurrencies, some market watchers warned that more crypto companies could go under after the crash of Terra token, LUNA. Since then, companies such as Three Arrows Capital (3AC), Voyager, DCX and Celsius have declared that they are unable to continue operation due to low liquidity or filed for bankruptcy.

Hodlnaut had earlier denied that it was not exposed to the LUNA and 3AC crashed. A user Glomer @Kluza said that the company, recently introduced support for $PAXG, a promo APY recently. They also offered long-term users incentives to participate in a 30 day loan/collateral lockup beta test (aka capital raise from users).

Another user, Dave, @HiMyNameIsDav said that the timing of the suspension had been planned by the company to coincide with the time of weekly payouts.

“To trap demographic of users that planned on making withdrawals after payouts.

 

Author: Jofor Humani

Jofor is a crypto journalist with passion for investigative review of projects with the aim to determine the authenticity of their claims.

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