Hodlnaut stopped offering services on its platform on Monday, citing liquidity problems and the need to discuss a recovery strategy with a legal advice firm as the industry battles to survive in the wake of a collapse in the price of cryptocurrencies.
In April 2019, a Singapore-based cryptocurrency company debuted as a marketplace for customers to borrow digital assets. A yield-earning feature of the program enables users to earn up to 7.25 percent interest on their investment. By lending users money to apparently verified institutions and businesses, Hodlnaut’s incentive structure functioned.
In Monday’s update, it was stated that all platform withdrawals had been put on indefinite hold due to liquidity problems. Additionally, the cryptocurrency lender has suspended additional operations, including as token swaps and deposits of digital assets.
The site now has discussions about a potential recovery plan open with legal advising firm Damodara Ong LLC. According to the statement released on Monday, customers will continue to have access to their dashboards and asset balances without trading services until a solution is found.
We are actively working on the recovery plan that we hope to provide updates and details on as soon as permissible. We are consulting with Damodara Ong LLC on the feasibility and timelines of our intended execution plan and are strategizing our recovery plan with our users’ best interests in mind.
The platform had additionally previously requested a license from the Monetary Authority of Singapore for a digital payment token (DPT). The crypto lender chose to focus all of its attention on resolving its current crisis, hence the application was withdrawn.
Hodlnaut is the most recent crypto lender to halt withdrawals
Following the Terra crash and a considerable drop in the price of crypto tokens, a number of businesses have made similar decisions regarding withdrawals and trading services.
At the time of publication, the troubled cryptocurrency lender Celsius was facing liquidation after pausing trade. A number of other firms, including Babel, Vauld, and cryptocurrency exchange Zipmex, have also halted withdrawals due to liquidity issues.
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