Key Takeaways:
- Hodlnaut said there are “pending proceedings” between the company and Singapore police and that the layoffs were to reduce the company’s expenditure.
- Last week, Holdnaut applied with the Singapore High Court to be placed under judicial management to avoid forced liquidation of its assets.
Battered Singapore-based crypto lender Hodlnaut disclosed an investigation by the Singapore police, adding that it has also laid off 40 people. The crypto lender said there are “pending proceedings” between the company and Singapore police and that the layoffs were to reduce the company’s expenditure.
With this layoff, the crypto firm has only about ten working employees.
In the blog post published on Friday, Hodlnaut added that it had slashed interest rates to 0% APR to help “stabilize our liquidity” and cut costs.
The company further pointed out that its dire financial state was due to losses suffered during the TerraUSD crash, unusually high volumes of withdrawals, and the overall decline in cryptocurrency prices from their 2021 highs.
The crypto lender in the blog post did not dwell deep into what the “proceedings” with Singaporean authorities meant. Instead, it noted the proceedings involving the city-state’s attorney’s general, adding that it cannot disclose any further information on the matter.
A Singapore court will hear Hodlnaut’s legal protection plea on August 22, 2022. After that, the court may further appoint an interim judicial manager to oversee the company’s financials in place of its current directors.
On August 13, 2022, Hodlnaut applied with the Singapore High Court to be placed under judicial management to avoid forced liquidation of its assets.
The firm described it as a “suboptimal solution,” requiring it to sell its users’ cryptocurrencies, including Bitcoin, Ethereum, and WBTC, at the current depressed asset prices.
In the latest blog spot, the firm had said the proceedings and the filing for judicial management would help the company and benefit the users “in the long run.”
On August 8, Hodlnaut announced that it would freeze withdrawals, deposits, and token swaps on the platform stating that “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.”
This makes Holdnuat a part of the growing list of crypto firms to succumb to market volatility and freeze withdrawal in recent days. Last month, cryptocurrency exchange Zipmex filed for bankruptcy protection in Singapore to avoid legal action from creditors after freezing withdrawals.
