- Hodlnaut has laid off 40 employees to lower expenses
- Losses suffered by the firm’s Hong Kong subsidiary during the TerraUSD crash hurt its business
Singapore-based cryptocurrency lender Hodlnaut is laying off most of its staff and announced “pending proceedings” with local police.
The firm said in an update on Friday that it is handling inquiries from the Singapore attorney general and the police force, without providing further details. Crypto regulation in the city-state is likely to get tougher as the central bank mulls new rules on retail participation.
Hodlnaut decided to slash its headcount by 80%, or about 40 employees, to lower expenses. The retained team is required to carry out key functions, it said.
Last week, the lender filed for a form of debt restructuring called judicial management after freezing withdrawals on its platform.
Hodlnaut said judicial management is what will “most benefit” users in the long run, as it would avoid liquidations of the firm’s bitcoin and ether holdings at current low prices.
Under the procedure, an independent officer is appointed to replace company directors and manage business affairs.
Meanwhile, its founders are in Singapore and working on the recovery plan. The plan, it says, is aimed at restoring Hodlnaut’s asset-to-debt ratio and allowing users to withdraw their funds at the full value of the deposited crypto. To stabilize liquidity, the company will cut all open-term interest rates to 0% from Aug. 22 at 5:00 pm Singapore time.
Hodlnaut is among a slew of crypto lenders hurt by the market rout. It attributed its current position to losses suffered by the firm’s Hong Kong subsidiary during the TerraUSD crash and “issues relating to certain user(s) who have deposited substantial amounts of cryptocurrency with Hodlnaut.”
It added that bankrupt lender Celsius hasn’t borrowed or lent to Hodlnaut. “Whilst Hodlnaut has an account with Celsius, Hodlnaut has not deposited any assets with Celsius,” the statement said. The firm also claims it has no secured creditors.
The company’s next update is likely to be on Aug. 23.
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