Crypto Lender Hodlnaut Pauses Withdrawals, Deposits, and Token Swaps

Singapore-based crypto lending platform Hodlnaut has joined a growing list of crypto lenders that have paused withdrawal services. The company announced on Monday that it had suspended token swaps and the deposit and withdrawal of funds, citing recent market conditions as the reason.

“To all users, we regret to inform you that we will be halting withdrawals, token swaps, and deposits with immediate effect. We have reached this difficult decision due to recent market conditions…Halting withdrawals and token swaps was a necessary step for us to stabilize our liquidity,” the announcement read.

The crypto lender has also withdrawn its license application to the Monetary Authority of Singapore (MAS.)

Wen Resumption?

Hodlnaut stated that there is no specific date as to when the halted services would resume. It noted that users should not expect the resumption date to be anytime soon as the company needs time to structure a long-term solution.

“It will not be a short process,” the company said. 

Hodlnaut added that the company is working with Singaporean law firm Damodara Ong to construct a recovery plan and explore options that would help stabilize liquidity and preserve users’ funds.

The crypto lender promised to update further on the issue on the 19th of August.

Crypto Lenders Struggle With Liquidity

The recent steps taken by Hodlnaut make it the latest crypto lender to do so in recent weeks. The crypto crash in Q2 affected several crypto firms, prompting them to take different measures to cope.

One such company is the now-bankrupt Celsius Network, an American crypto lending company that in June halted all withdrawals, swaps, and transfers of assets between accounts on the platform.

Hong Kong-based crypto lender Babel Finance followed suit a few days later, announcing the temporary suspension of all its withdrawal and redemption services.

Unlike Celsius and Babel Finance, other crypto firms cut off some of their workers instead. For instance, the American crypto lender BlockFi reduced its workforce by 20%, laying off about 250 of its employees.

Leading crypto exchange, Coinbase also downsized its workforce by 18%, slashing off over 1000 workers in the process.   Last month, OpenSea, a Non-fungible token (NFT) marketplace, reduced its employees by 20% leaving the company with only 769 workers thereafter.