Hodlnaut, a Singapore-based cryptocurrency lender, has interrupted crypto exchanges, withdrawals, and deposits because of "recent market conditions." The central bank has canceled the offer of Hodlnaut to withdraw its application with the Monetary Authority of Singapore (MAS) to provide digital payment services, Washington Post confirms.
Hodlnaut users are allowed to earn interest as much as 7.25% and the company has acquired $250 million in assets. However, the users will not be able to withdraw these assets but still be able to have interest on their account to balance the asset liquidity and create a solution.
Hodlnaut is another company that has gotten caught up in the unstable crypto market. Many other companies such as Terra and Celsius have already found themselves in similar, or even worse situations.
Frances Coppola, financial writer and CoinDesk columnist, has shared his views on the situation:
"Hodlnaut is a shadow bank, not an asset manager, exchange or trading platform [...] Customers are lending their money to the platform for it to do as it pleases, and they are simply unsecured creditors of the platform [...] They are not entitled to the return of their funds."
Hodlnaut represents yet another in a series of companies that started showing their vulnerabilities once the market began to crumble. As Coppola stated, such projects lack transparency, and despite their official statements, many are still wondering whether there might be other forces at play behind the curtain.