FTX Potential Fall May Send a Blow to Crypto Lending Firm Hodlnaut

Hodlnaut is similar to crypto lenders Celsius, Three Arrow and Voyager Digital.

Hodlnaut, a crypto lender based in Singapore, suffered another setback on its way to recovery when it emerged that it held SDG 18.3($13.3 m) million worth of crypto on FTX, the exchange that collapsed earlier on 9 November 2022.

In the first report presented in the court by interim judicial managers(IJM), it is noted that “Among other reasons, the company’s accounting and financial records have not been properly maintained.” Further, it is noted that employees and directors of several companies are trying to access “several important books and records of the firm.”

Hodlnaut, a troubled cryptocurrency lender, downplayed its exposure to the destroyed digital-token ecosystem that fugitive Do Kwon created, but the ecosystem’s collapse resulted in a loss of nearly $190 million.

The collapse of Terra has troubled the whole crypto market, and major market players affected by the crash were Celsius Network(Crypto Lender), Three Arrows Capital, and Voyager Digital.

A review of transaction data by judicial managers shows that HodlKnot employees withdrew a total of $550,000 between the beginning of July and the firm closing withdrawals to clients.

Earlier on 10 November 2022, Galaxy Digital released its quarterly earnings on 9 November 2022 and noted that $76.8 million exposure to troubled crypto exchange FTX comprised cash and digital assets. Considering this amount, Galaxy Digital noted that $47.5 million is currently in withdrawal.

According to data from CoinMarketCap, While writing this article Native token of FTX, FTT, is trading at $3.49 with a 24-Hour trading volume of $868,021,622.79.

The price of FTT tokens fell by 90-95 percent on 9 November, and this crash hit the market very hard and even impacted the price of giants cryptocurrencies like Bitcoin and Ethereum.

Earlier in August 2022, A Blog by Hodlnaut highlighted that the company had fired 40 people and sliced interest rates to zero per cent APR to stabilize their liquidity and shorten costs. The developers of the firms are” working hard on a rescue plan” and remain in Singapore.

The interest-paying crypto swap shop is gripped in Legal proceedings with Singapore authority. Its blog was mum on the points but portrayed the proceedings as in the user’s best interest. In August, Hodlnaut froze those users’ assets and now seeks to safeguard its creditors.

According to the report, in a letter dated July 21, the directors of Hodlnaut “made an about-turn” regarding the impact and informed a Singapore police department that digital assets had been converted into TerraUSD.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing