Hodlnaut Slashes 80% of Workforce Ahead of Application For Singapore Judicial Management

Hodlnaut is the latest name under the layoff effect across the industry. The cryptocurrency lending platform has applied for judicial administration and laid off most of its employees in an effort to reduce costs.

Consistent revenue growth, skyrocketing prices, and wide employment opportunities are now distant memories as the major players in the crypto sector are facing the reality of the financial crisis, lagging growth, postponed plans, and are forced to cut jobs.

Crypto lender Holdnaut said on Friday that the company has cut off 40 staff members, equivalent to 80% of its workforce as the latest casualties of diminishing performance. The company only retained a sufficient workforce to maintain its core operations.

Another Bust

Previously, Hodlnaut announced the halting of deposits and withdrawals on the platform.

The troubled company has also filed an application for Singapore judicial management and waited for the court’s decision on August 22. If the court agrees to grant the judicial management order, it will appoint a person to temporarily act as the company’s judicial manager.

The Singapore-based cryptocurrency company said it is awaiting proceedings with the Singapore Attorney-General and the Singapore Police Force, according to the latest announcement.

During the court filing, Hodlnaut also admitted to losing $190 million from investments in UST. However, the company refused to have any contact with Anchor.

3AC Pops Up Again

Hodlnaut may not interact with Anchor, it is tightly connected to Terra and Three Arrows Capital. Hodlnaut, like previous troubled lending platforms that have gone bankrupt, could not be ruled out.

Earlier this month, the company decided to stop withdrawals and file for judicial administration in order to prevent being compelled to liquidate assets by creditors.

Vauld and Zipmex are also in the same boat, and the court has granted them a three-month extension to further assess the best choices for their platforms.

If 2021 was an exciting year for the cryptocurrency business, 2022 will be a bleak year for cryptocurrencies. The market fell into a decline as a result of the negative macro variables and conditions.

Most financial markets, including cryptocurrency, have been significantly impacted by negative macroeconomic circumstances. Many people believe that the cryptocurrency sector has had a rough start to 2022.

Only a few days earlier, Genesis Trading announced a 20% workforce layoff and the resignation of CEO Michael Moro. Genesis is a major creditor of Three Arrows Capital.

The Bear Roars

In the setting of the bear market, investor sentiment grew exceedingly fearful, many companies went bankrupt, and the effect of staff reductions arose concurrently.

Job quality has suffered as a result of the layoff effect, making it difficult to attract talent to the industry. The cause is the global economic downturn, excessive inflation, and the impact of catastrophic events in the sector.

Starting with Gemini in June, the company’s founders opted to cut 10% of their workforce. This occurrence is known to be related to the exchange’s low trading volume, which accounts for less than 2% of the market share.

The platform, however, did not provide specifics on how many people will be laid off. Gemini announced layoffs for the first time since its start in 2014.

Coinbase, one of the leading US cryptocurrency exchanges, has also announced the layoff of 1,100 employees. In the last 18 months, Coinbase’s staff has doubled to almost 5,000 people.

Coinbase CEO Brian Armstrong announced on June 14 that the exchange would lay off employees to preserve the exchange’s stability during the current economic crisis.

Aside from big exchanges like Coinbase and Gemini, BlockFi, a New York-based crypto lending platform, revealed on June 13 that it is in the process of laying off approximately 20% of its workforce.

Market conditions, according to the company’s co-founders, have had a negative impact on the company’s growth pace. Workforce layoff and marketing expense reduction are unavoidable results.