Hodlnaut reports a $193 million hole in its balance sheet

The capital shortfall of the crypto-lending platform Hodlnaut as of August 8, 2022 stood at $193 million. This follows from bankruptcy court documents in Singapore, The Block reports.

As of the reporting date, the company’s liabilities were valued at 391 million SGD (~$281 million), assets at 122 million SGD (~$88 million). In other words, Hodlnaut could recover only 31 cents per dollar of debt.

The company’s creditors number 17,513 individuals. At its peak in May, the firm’s assets under management AUM reached $750 million.

The platform converted $317 million into TerraUSD (UST) to chase higher yields via the Anchor protocol, which led to a loss of $189.7 million.

In a new filing from Hodlnaut, they admit to have had most of their AUM in UST through their HK DeFi spin-off entity, and they lost a whopping $190m in the Terra crash. Despite this, they continued to tell customers they had zero Anchor exposure. Send JT and CT to prison. https://t.co/6knPSgrV8r pic.twitter.com/e3wt7VgfY8

— FatMan (@FatManTerra) August 19, 2022

\n\n\n\n

From July 14 to 15, Hodlnaut faced a bigger-than-usual outflow of customer funds totaling $150 million. The platform’s reserves in Bitcoin and Ethereum were negatively revalued amid a deteriorating market backdrop.

\n\n\n\n

The company is considering a ‘limited withdrawal’ option for users who agree to a 25-cent recovery for every dollar of liabilities. FTX, in particular, proposed such an option.

\n\n\n\n

\”This is likely to be the best option rather than liquidation. The latter would take longer and could lead to a smaller return for funds, given the fees necessary for the procedure and the current asset-to-liability ratio\”, according to the document.

\n\n\n\n

Hodlnaut intends to undergo a restructuring and return to profitability, taking into account a positive operating history since its founding in 2019 up to the Terra collapse.

\n\n\n\n\n\n\n

On August 8 the platform halted withdrawals, swaps and token deposits.

\n\n\n\n

On August 16 Hodlnaut filed for protection in court from creditors.

\n\n\n\n

Earlier, other Singapore-based firms — Vauld and Zipmex.

\n\n\n\n

Read ForkLog’s bitcoin news in our Telegram — cryptocurrency news, prices and analytics.

\n