Crypto lender Hodlnaut has frozen user funds amid supposed liquidity constraints.
The service announced an indefinite halt on all withdrawals.
Other features like deposits and token swaps have been paused as well till further notice.
Hodlnaut’s update also cited a recovery plan currently in the works and a legal advisory firm in the mix.
The platform has withdrawn its crypto license application with Singapore’s top watchdog pending a resolution.
The crypto lender is the latest company to take this route.
Other firms like Babel, Celsius, Vauld, and Zipmex made similar announcements.
Hodlnaut halted services on its platform on Monday citing issues with liquidity and the need to explore a recovery plan with a legal advisory firm as crypto lenders in the industry battle to stay afloat in the wake of a cryptocurrency market slump.
The Singapore-based cryptocurrency firm launched in April 2019 as a platform where users could borrow digital assets. Furthermore, the service boasts a yield-earning component that allows customers to earn up to 7.25% interest on their holdings. Hodlnaut’s interest structure worked by lending users funds to supposedly vetted institutions and companies.
Monday’s update announced that all withdrawals on the platform have been paused indefinitely citing liquidity issues. Also, the crypto lender has halted other operations like digital asset deposits and token swaps till further notice.
Moving forward, the platform opened consultations with legal advisory firm Damodara Ong LLC on a possible recovery plan. Customers will retain access to their dashboards and asset balances without trading features until a resolution is reached, per Monday’s statement.
We are actively working on the recovery plan that we hope to provide updates and details on as soon as permissible. We are consulting with Damodara Ong LLC on the feasibility and timelines of our intended execution plan and are strategizing our recovery plan with our users’ best interests in mind.
The platform also had previously applied for a digital payment token (DPT) license with the Monetary Authority of Singapore. However, the application was withdrawn as the crypto lender opted to focus its full attention on resolving its current crisis.
Hodlnaut The Latest Crypto Lender To Pause Withdrawals As Contagion Continues
In the aftermath of the Terra crash and a significant slump in crypto token prices, several firms have announced similar decisions regarding withdrawals and trading services.
Beleaguered crypto lender Celsius paused trading earlier and faces liquidation at press time. Other services like Babel, Vauld, and crypto exchange Zipmex also paused withdrawals citing liquidity constraints.