Hodlnaut cuts 80% of employees, saw $317m exposure to UST collapse

In a bid to stabilize its business, Singapore-based crypto lender Hodlnaut has laid off 80% of its employees, which translates to around 40 people. The firm has also decided to change its open term interest rates to 0%, effective August 22.

Hodlnaut team / Photo credit: Hodlnaut

In a statement, the firm announced that it has applied to go into judicial management due to “financial health,” citing the Terra crash in May and the overall crypto market decline as among the reasons for its losses.

This means that a court-appointed judicial manager will take over the company’s operations and help it recover if the application is approved – pending a hearing set to take place on August 22. The manager will also review all of Hodlnaut’s accounts and activities, and they will hold the final say on all aspects of the company.

Withdrawals of funds during this time are still not supported, following the crypto lender’s suspension of operations earlier this month.

Hodlnaut also confirmed that it has legal proceedings with the Singapore police, though it is “unable to disclose any information in this regard.” It assured users that its founders are in Singapore and “working hard on the recovery plan.”

The firm, which was founded in 2019 by Juntao Zhu and Simon Lee, may have had over US$317 million of its assets exposed to the UST blockchain collapse via its Hong Kong entity. In a series of tweets posted by blockchain researcher FatManTerra, the firm lost US$190 million during the crash.

Hodlnaut said that it aims to post its next update on the situation on August 23.

See also: Hodlnaut may have had $187m exposure to Terra collapse