Hodlnaut Announces Police Enquiry, Cuts 80% of Staff

Troubled cryptocurrency lender Hodlnaut announced today that he is being investigated by the police and has had to cut 80% of his workforce.

The Singapore-based crypto firm updated its community after filing for judicial management last week. Hodlnaut says he has cut about 40 people, “to reduce the company’s expenses.” His statement stated that the 10 remaining employees are “needed” for its current operations. In addition to announcing staff cuts, Hodlnaut is also pursuing pending proceedings with the Singapore Attorney General and the Singapore Police Force. He added,

Although Hodlnaut is unable to disclose any information in this regard, these actions are taken in what we believe to be in the best interest of our users.

After announcing it would suspend customer withdrawals on August 8, the company filed for judicial management in Singapore, which will see an independent third party oversee the company’s operations and temporarily halt legal action against the company. Hodlnaut tweeted in early August that he would freeze token withdrawals, deposits and exchanges on his platform, adding:

This difficult decision was made for us to focus on stabilizing our liquidity and preserving assets as we work to find the best way to protect our users’ long-term interests.

The company said judicial management would help the company and benefit users “in the long run”. Judicial management will also prevent the company from having to liquidate its current holdings in Bitcoin and Ethereum at a time when prices are particularly low.

Hodlnaut is the latest in a series of companies to have encountered problems in these market conditions. On July 22, cryptocurrency exchange Zipmex filed for bankruptcy protection in Singapore in an attempt to avoid legal action from creditors after blocking customer withdrawals. Regulators are also in the wake of the now insolvent crypto hedge fund, Three Arrows Capital, which has defaulted on its loans to other major cryptocurrency lenders.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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