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Crypto Lender, Hodlnaut, Seeks Protection Amid Police Scrutiny

thetradingbay

Top Singaporean crypto lender Hodlnaut has found itself in stormy waters after the company announced massive layoffs on Friday amid pending police proceedings. The company’s current financial predicaments have seen it freeze crypto withdrawals as it continues to work out solutions to its problems. 

In a blog post published Friday, the crypto lender announced that it slashed its interest rate to 0% APR and reduced its workforce by 80% after firing 40 staff members. The company believes the move is long overdue and will help stabilize its liquidity in the interim. The company advocated for support from investors, adding that it is working hard on a recovery plan that will bring some much-needed stability.

While Hodlnaut announced that it is liaising with relevant government authorities, it failed to provide further clarifications on the proceedings. Even though the company froze investors’ assets in August, the crypto lender is now seeking protection from its investors. 

Crypto Lenders in turmoil

This year has been particularly challenging for many crypto lenders, with top crypto lenders like Celsius, Voyager Capital, and Three Arrows Digital declaring bankruptcy in the last couple of months. With what’s happening in Singapore, it appears Hodlnaut has joined the list of failed crypto lenders for the year. 

The firm has blamed its financial woes on cratering market conditions that are forcing many crypto firms to rethink their strategies. More so, the company announced that it suffered significant losses from the TerraUSD crash, which happened a while ago. 

Meanwhile, a few months ago, Coinbase had to cut its workforce significantly to manage its financial crisis, even though the exchange denied being in a difficult place financially. Analysts saw the move as the exchange’s proactive effort to address its financial crisis. 

A Singapore court will hear Hodlnaut’s legal protection plea sometime next week. With that in place, the court may be forced to appoint an interim judicial manager to take over the company’s financials. This would mean for the current directors to relinquish their positions. 

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