Troubled crypto lender Hodlnaut suffered a nearly $190 million loss in TerraUSD (UST) collapse despite downplaying its exposure to the coin, Bloomberg reported on Monday, citing findings from an interim judicial managers’ report.
Hodlnaut Suffered $190 Million Loss in TerraUSD Crash
UST, an algorithmic stablecoin that is meant to be pegged 1:1 to the U.S. dollar, lost its peg in May and prompted a widespread crash of the entire crypto sector.
As per the report, in a July 21 letter, Hodlnaut’s directors “made an about-turn” about the impact and informed a Singapore police department that digital assets had been converted” to UST on its platform.
Most of the UST was staked on Terra-based lending and borrowing platform Anchor Protocol to generate a yield, according to the report. The findings stated that Hodlnaut’s Hong Kong division made a $190 million loss when it dumbed the coin “as its claimed dollar peg frayed.”
The report also revealed that about $548,436 was withdrawn by some of Hodlnaut’s employees between July and the time the firm froze withdrawals on its platform.
“It appears that the directors had downplayed the extent of the group’s exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022,” the report stated.
On August 29, Hodlnaut was placed under interim judicial management (IJM) by the Singapore High Court, a few weeks after the lender halted token swaps, deposits, and withdrawals on its platform due to extreme market conditions.
Per the latest judicial report, over 1,000 documents have been deleted from Hodlnaut’s Google workspace so far. As a result, the judicial manager said they have been unable to acquire several “key documents” relating to Hodlnaut’s Hong Kong division.
Crypto Firms Struggle Amid Bear Market
Meanwhile, just like Hodlnaut, several other crypto firms have failed to stay afloat due to the recent bear market, which was triggered by the Terra ecosystem implosion and macroeconomic conditions.
In July, crypto lenders including Celsius Network and Voyager Digital filed for bankruptcy in the U.S. Bankruptcy Court of the Southern District of New York after suspending withdrawals on their platforms due to extreme market conditions.
Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!
Source: https://coinfomania.com/hodlnaut-lost-190m-in-the-terrausd-collapse/