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Scott Shuey · · 2 min readHodlnaut assets hit by FTX debacle
There are no safe havens for crypto assets this year, not even bankruptcy court.
Hodlnaut, the Singapore-based crypto lender under judicial protection after halting withdrawals on August 9, may face further losses due to solvency issues at FTX, the Bahamian cryptocurrency exchange.
FTX, where Hodlnaut had S$18.1 million in assets as of October 27 according to court documents, suspended withdrawals on Tuesday.
In total, Hodlnaut has S$25.3 million in centralized exchanges including FTX, Deribit, Binance, OKX, and Tokenize. The majority of Hodlnaut’s assets – S$74.5 million – are still held in decentralized wallets, while total assets stood at S$104 million, according to documents.
The majority of Hodlnaut’s centralized holdings are in Bitcoin (S$14.5 million as of October 27) and Ethereum (S$9.99 million). As of today, Bitcoin and Ethereum are down by 5.5% and 10.4%, respectively. Hodlnaut’s FTX accounts held 514 bitcoins, 1,395 ether, and 280,348 USDC.
Even if FTX resumed allowing withdrawal, the loss in value from tanking crypto markets following the news that Binance will acquire FTX would be close to S$8.4 million.
Hodlnaut also held 1,001 FTT tokens, which shed over 75%of its value on Tuesday. FTT is the native token of FTX, and holders of the token were given discounts on trading fees.
After a week of speculation, has ceased all non-fiat withdrawals on Tuesday.
FTX founder Sam Bankman-Fried / Photo credit: FTX
FTX’s issues started after reports that its sister company, Alameda Research, held unusually large amounts of FTT in its books. The news raised questions about the interconnectedness of the two firms, which were both founded by Sam Bankman-Fried.
Following the news, Binance CEO Changpeng Zhao declared on Twitter that he would liquidate his company’s 23 million FFT tokens, which are valued at approximately US$529 million. However, he added that the liquidation process would take months.
Despite Zhao’s announcement, the market responded with a sell-off, however. Citing an internal message to employees sent by FTX’s Bankman-Fried,
Reuters reported that US$6 billion was pulled from the exchange over the past several days.
Editing by Terence Lee and Eileen C. Ang
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Fallout from FTX’s solvency issues are being felt far and wide, even in Hodlnaut’s IJM proceedings.
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