Hodlnaut, a struggling Singapore-based cryptocurrency lending and borrowing platform, is said to have lost $190 million as a result of Do Kwon’s stablecoin TerraUSD (UST) that lost its peg with the US dollar back in May.
Token’s collapse is one of the most devastating crypto downfalls so far this year. According to multiple reports, the crash of the native token LUNA and the stablecoin UST led to significant loss and even resulted in some investors’ suicides.
According to a recent Bloomberg report, Hodlnaut switched some portions of its holdings in crypto assets to UST earlier this year. The company suffered a loss of around $190 million after stablecoin’s drop. In accordance with the report:
“It appears that the directors had downplayed the extent of the group’s exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022.”
As Bloomberg’s research shows, Hodlnaut appears to be concealing the information as it destroyed more than 1,000 “key” documents that might have revealed the aforementioned risk. As a result, the judicial managers were unable to resolve the problems between the company’s Pte in Singapore and Hong Kong subsidiary.
UST Crash affects Hodlnaut
TheCoinRise has already reported earlier that the platform records $193 million as a financial shortfall from UST Crash.
In August, Hodlnaut put a halt to deposits, withdrawals, and token exchanges, citing “difficult market conditions.” Moreover, it laid off nearly 80% of its employees the very same month, as TheCoinRise reported.
In an effort to “rehabilitate” the company and prevent unnecessary liquidation of its assets, Hodlnaut filed an application with the Singapore High Court to be put under judicial management.
The company hoped by asserting: “The judicial management application provides a moratorium [or temporary pause] against legal claims and proceedings against Hodlnaut. This pause will provide us with the breathing space to focus our efforts on the recovery plan to rehabilitate the company.”