Bitcoin platform Hodlnaut, which has come to the fore with the news of recent liquidity problems, has published an announcement. Hodlnaut, who works as a crypto lending company, announced that he was being investigated by the police and started layoffs to avoid going bankrupt. According to the leaked documents of the company, the Terra connection also attracted attention.
Bitcoin platform faces lawsuit
Hodlnaut released an update today on the recovery efforts and forensic management process. The Singapore-based crypto lending firm announced that it is being investigated by the judiciary and the police. On August 8, the date it all started, the user froze withdrawals. Then, on August 16, he came under the rule of a court-appointed officer. Thus, Hodlnaut initiated a judicial management process that would protect the company from legal claims.
Yesterday, the company released an important announcement. Accordingly, the legal representative attended the first litigation conference for judicial management practice on August 18. The crypto loan firm has announced that its anticipated application to the interim judicial administration will be discussed on August 22. This process will run in parallel with the judicial management practice, the hearing date of which is August 30.
Hodlnaut linked to Terra collapse
Access to transaction documents is actually limited to customers. However, according to the emerging news, the details of the transactions leaked to the public. Hodlnaut said months ago that he had no direct exposure to the recently crashed TerraUSD (UST). However, leaked documents show that the Bitcoin platform is staking TerraUSD through the Anchor Protocol. TerraUSD, the stablecoin of Terra, lost its stability in May, as we reported as Kriptokoin.com.
After that, LUNA and UST collapsed and lost all of their value. According to leaked data, Hodlnaut lost $189.7 million due to Terra’s investment in the UST stablecoin. However, the high withdrawals experienced on the platform deepened the liquidity crunch. In addition to the unexpected withdrawals, the 2022 bear market also hit the platform. Today, cryptocurrencies are trading well below their 2021 highs. Because of these, Hodlnaut came to the brink of bankruptcy.
Bitcoin platform fires most of its employees
Hodlnaut also announced today that it is laying off 80% of its workforce to cut costs. Now, there are only 40 employees left in the company. The Bitcoin platform says the remaining employees on the team are “the number of staff required to perform basic functions.” The BTC company also announced that it will reduce burn rates as part of its attempts to regain liquidity.
In addition, they also aim to change all open interest rates to 0%. These recovery policies will take effect from August 22. The company says it will likely release its next update on August 23. Credit platforms seem to continue to struggle due to various liquidity problems in the bear market. Asia-based Vault and Zipmex are also experiencing similar issues to Hodlnaut.
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