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Crypto firm Hodlnaut reveals police proceedings and slashes jobs

·2-min read
Hodlnaut said there are “pending proceedings” between the company and Singapore police and that it has slashed its workforce.
Beleaguered cryptocurrency lender Hodlnaut said its founders are in Singapore and “working hard on the recovery plan”. (PHOTO: REUTERS/Dado Ruvic/Illustration)

By Joanna Ossinger

(Bloomberg) — Beleaguered cryptocurrency lender Hodlnaut said there are “pending proceedings” between the company and Singapore police and that it has slashed its workforce.

The proceedings also involve the city-state’s attorney-general and it’s unable to disclose any further information on the matter, Hodlnaut said in a statement Friday. The firm has laid off some 40 people, or about 80% of employees, according to the statement.

The company said its founders are in Singapore and “working hard on the recovery plan.” Earlier this week, Hodlnaut said it had filed an application in Singapore to be placed under a form of creditor protection. The police are unable to comment on the case as the matter is before the courts, it said in response to a request for comment from Bloomberg News.

Hodlnaut also said Friday it’s cutting all open-term interest rates to 0% as of 5 p.m. on Aug. 22 to stabilise liquidity.

This year’s crypto rout led to a number of blowups afflicting digital-asset exchanges, lenders and hedge funds. Some of those, as in the case of Hodlnaut, have hit Singapore.

Hodlnaut said its business has been hurt by losses at its Hong Kong subsidiary during the TerraUSD stablecoin crash. It also cited unusually large withdrawals, the overall crypto slide and “issues relating to certain user(s) who have deposited substantial amounts of cryptocurrency” with the firm.

Hodlnaut said it doesn’t have any secured creditors. It said that crypto lender Celsius Network has neither borrowed nor lent to Hodlnaut, adding that Hodlnaut has an account with Celsius but hasn’t deposited any assets with Celsius.

Hodlnaut aims to restore its asset-to-debt ratio to at least 1 and eventually allow users to withdraw the full value of their cryptocurrency deposits.

The company said its next update will likely be on Aug. 23.

© 2022 Bloomberg L.P.