Beleaguered crypto lender Hodlnaut has fired 80% of its workforce and asked to be placed under judicial management in Singapore.
In its second update this month, Hodlnaut revealed that In order to cut costs it has laid off 40 workers since it stopped allowing withdrawals. “The current team that we have retained are, in our assessment, necessary headcount in order for us to carry out key functions,” the company said.
The crypto lender announced in its last update that it has filed an application with the Singapore High Court to be placed under judicial management for protection from creditors.
Hodlnaut blamed its losses on its Hong Kong subsidiary during the TerraUSD crash, in combination with unusually high withdrawal volumes, the overall decline in cryptocurrency prices from their 2021 highs, and problems with specific users with significant deposits.
In addition, Hodlnaut has revealed, without giving details, that the platform is involved in “proceedings” with the Singapore Police Force and attorney general’s office.
Singapore could make legislative changes
Tharman Shanmugaratnam, Senior Minister and Minister in charge of the Monetary Authority of Singapore, recently answered a question about the extent of Singaporeans’ exposure to the Terra collapse.
While Tharman had assured that “MAS is actively reviewing its approach to the regulation of stablecoins,” more changes might be incoming for the sector as the legislation grows stricter.
Meanwhile, the platform believes that judicial management is the best long-term course of action for its users considering the current market conditions.
Hodlnaut said: “The plan is aimed at restoring our asset to debt ratio to at least 1 and eventually allowing users to withdraw the full value of their cryptocurrency deposited with Hodlnaut.”
Hodlnaut also announced that it will be reducing its burn rates in order to further stabilize the platform’s liquidity. “We will therefore be changing all open term interest rates to 0% APR from 22 August, 5pm (GMT+8),” it said.
Meanwhile, the platform is waiting for an Interim judicial manager to assess the situation and put forward a recovery strategy to be voted on by Hodlnaut’s creditors.
Until then, no withdrawals have been permitted. However, the platform hopes to provide the next update on Aug 23.
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