Bitcoin News

Hodlnaut faces legal action and eliminates 80% of its workforce

The troubled cryptocurrency lender Holdnaut has disclosed that it laid off the majority of its workforce and is currently being investigated by the police.

In a blog post that was published this morning, the Singapore-based cryptocurrency company stated that there are “pending processes” between itself and the Singapore Attorney-General and Singapore Police Force.

In an effort to buy more time to address its liquidity problems, Hodlnaut halted withdrawals earlier this month and subsequently filed for creditor protection in Singapore.

In the wake of the failure of Terra, the blockchain that supported the now-defunct stablecoin UST, and the cryptocurrency hedge fund Three Arrows Capital earlier this year, the startup is one of a number of crypto lenders that have frozen customer funds. Along with South Asian cryptocurrency exchange Zipmex, Vauld, which is also situated in Singapore, is constrained by the same issue.

Holdnaut has asked to be put under court supervision. If successful, the action will grant the judicial manager final decision-making power on all elements of the organization moving forward.

The startup continued, citing losses sustained during the UST crash as well as unusually high volumes of withdrawals, the overall decline in cryptocurrency prices from their 2021 highs and issues relating to certain user(s) who have deposited substantial amounts of cryptocurrency with Hodlnaut as the cause of its financial difficulties.

Hodlnaut has made significant cost-cutting efforts. Since stopping withdrawals, the business fired 40 employees, or about 80% of its workforce. The business further noted that the present team that they have kept is, in their judgment, essential headcount for them to carry out key functions.

This is still a developing story, stake updated.

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