Hodlnaut Cuts 80% of Staff While Under Investigation by Singapore Authorities

Scary Friday has prepared a couple of unpleasant surprises for many, and the already nearly insolvent Hodlnaut has to tighten its grip in order to survive yet another crypto bloodbath. Just a few days ago, the Singaporean crypto company had to file for creditor protection. The judicial management might be the only choice for the crypto platform, which has halted all transactions since the 8th of August.

80% of Workers Are Gone with the Wind

Most crypto companies had to cut around 10-30% of their staff during “volatile market conditions,” but Hodlnaut had to make a dramatic change: 80% of the staff were laid off today. This move comes just 10 days after the suspension of all deposits and withdrawals. Moreover, the protection from creditors by the judicial management was supposed to prevent the forced liquidation of the company’s assets.

Moreover, Hodlnaut posted a message on their official blog, thanking the users for their patience. The company representatives also emphasized that the rest of the workers that are left on the team will “play a vital role in reviving the company.” According to the blog post, the most damage has been done in Hodlnaut’s Hong Kong subsidiary.

As the story goes, there was $187 million in the subsidiary that was allocated to the infamous Terra (LUNA) and Terra (UST). When Terra (LUNA) and its algorithmic stablecoin crumpled to pieces in May, Hodlnaut suffered an unexpectedly big loss, heavily shaking the ecosystem of the crypto trading platform.

Hodlnaut Might Resume Withdrawals

Over and beyond that, there might be some good news for users of the cloistered crypto platform. Hodlnaut disclosed that they’re “exploring withdrawal options,” meaning that at some point the customers will be able to withdraw their funds, but most likely with zero interest rate. This is confirmed by the founders of Hodlnaut, who said that “In order to further stabilize our liquidity, we will be taking steps to reduce our burn rates. We will therefore be changing all open term interest rates to 0% APR from 22 August, 5 pm (GMT+8).”

While there’s still pending litigation with Singapore Police Force, the company is attempting to carry out its revival plan. As the Singaporean company didn’t go for a complete moratorium like Vauld, but rather for judicial management, there’s a chance to get things in order.

On the Flipside

  • Despite rumors on social media, Hodlnaut didn’t have any assets on Celsius, another bankrupt crypto platform. This was repeatedly confirmed in the official blog message.

Why You Should Care

The court proceedings of this case might have a huge impact on the crypto industry, as there are at least 5 companies going through similar legal processes.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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Author

Tadas Klimasevskis is a reporter, focusing on the latest tendencies of the crypto galaxy. He spends his time digging deeper into specific areas like meme coins such as Shiba Inu (SHIB) & Dogecoin (DOGE), music NFTs, sports NFTs, digital art and Pop culture in Web 3.0. Tadas strongly believes in crypto as disruptive innovation and keeps an eye out for new crypto hubs being developed around the globe. His vast experience in social media lets him quickly spot what’s going on in the mercurial world of crypto and deliver stories with unique spins. He has been active in blockchain and cryptocurrencies since 2019.