Apart from halting withdrawals, Hodlnaut has also informed Singapore’s Monetary Authority (MAS) about withdrawing its license application that received in-principle approval from the central bank back in March.
Singapore-based crypto lending platform Hodlnaut has joined a list of other crypto companies halting withdrawals as a result of the current unfavorable market conditions. According to the announcement made by Hodlnaut, the company is halting withdrawals, token swaps, and deposits, as well as stopping regulated digital payment token (DPT) services and ceasing all borrowing and lending services.
Hodlnaut stated:
“We understand that this is disappointing news and understand its impact on you. We would like to reassure you that this difficult decision was taken for us to focus on stabilizing our liquidity and preserving assets, while we work to find the best way to protect our users’ long-term interests.”
Hodlnaut Withdrawals Halting and Other Measures
Apart from halting withdrawals, Hodlnaut has also informed Singapore’s Monetary Authority (MAS) about withdrawing its license application that received in-principle approval from the central bank back in March.
It is not clear when Hodlnaut will get back to normal operating. At present, the crypto lender is working on a recovery strategy. It is also discussing the possible solutions with Damodara Ong LLC, a provider of strategic advice and legal services in dispute resolution and litigation matters. The next update on the matter is expected to be on August 19.
Crisis in Crypto Industry
Crypto winter started with the collapse of the TerraUSD stablecoin in mid-May. Besides, the insolvency crisis across crypto institutions has sent the market into severe bear tendencies, which has been especially obvious in the second quarter of this year. Many crypto lenders reported liquidity issues, as a result of which they had to halt customer withdrawals to preempt potential bank runs.
Crypto hedge fund Three Arrows Capital applied for bankruptcy. South Asian crypto exchange Zipmex filed for protection from bankruptcy. Vauld and Celsius did the same, but for the latter, the measure was not effective, and the company filed for bankruptcy as well.
Since the massive rally in 2021, digital currencies have lost as much as $2 trillion in value, with Bitcoin (BTC) trading at around $24,000, times down from November’s all-time high of nearly $69,000.
There are no clear signs of the industry recovery, but some analysts believe that the crypto winter will be over before the end of 2022. According to Edward Moya, senior market analyst at brokerage firm Oanda, the recovery will be much faster if the Bitcoin price stabilizes. Another expert Edul Patel, the CEO and co-founder of crypto trading platform Mudrex, also thinks that it will not take long to start recovering.
Meanwhile, Grayscale Investments analysts believe that crypto market cycles last about four years. Currently, we are about three years and a couple of months into the current cycle. In other words, there is a long time ahead before the crisis will be over.
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