Troubled crypto lender Hodlnaut today announced that it is subject to a police inquiry, and has had to cut 80% of its workforce.
The Singapore-based crypto firm updated its community after it filed for judicial management last week. Hodlnaut says that it cut roughly 40 people, “to reduce the company’s expenditure.” Its statement said that the 10 remaining employees are “necessary” for its current operations. In addition to announcing staff cuts, Hodlnaut is also fielding pending proceedings with the Singapore Attorney General and the Singapore police force. It added,
While Hodlnaut is unable to disclose any information in this regard, these actions are taken in what we believe to be in the best interests of our users.
After announcing that it was pausing customer withdrawals on August 8, the company filed for judicial management in Singapore, which will see an independent third-party oversee the firm’s operations, and will also place a temporary halt on legal claims against the firm. Hodlnaut tweeted early in August saying that it would freeze withdrawals, deposits, and token swaps on its platform, adding:
This difficult decision was taken for us to focus on stabilizing our liquidity and preserving assets, while we work to find the best way to protect our users’ long-term interests.
The firm has said that judicial management would help the company and benefit users “in the long run.” Judicial management will also prevent the firm from having to liquidate its current Bitcoin and Ethereum holdings at a time when prices are particularly low.
Hodlnaut is the latest in a slew of companies to have experienced trouble in these market conditions. On July 22, crypto exchange Zipmex filed for bankruptcy protection in Singapore in an effort to avoid legal action from creditors after it froze customer withdrawals. Regulators are also hot on the heels of the now-insolvent crypto hedge fund, Three Arrows Capital which defaulted on its loans to other major crypto lenders.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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