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Sunday, December 4, 2022

Algorand Foundation Outlines 35Million Exposure To Crypto Lender Hodlnaut

The Algorand Foundation has disclosed a hole in its balance sheet of $35 million USDC caused by exposure to the troubled cryptocurrency lending company Hodlnaut, which has suspended withdrawals since August 8.

Algorand is a blockchain infrastructure designed for institutional use that includes inbuilt smart contract capability. A community-based non-profit organization, the Algorand Foundation, is dedicated to fostering the Algorand ecosystem.

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On September 9, the Algorand Foundation announced on its website that it was “pursuing all legal remedies to maximize asset recovery.”

Hodlnaut’s financial situation first deteriorated when its $300 million investment in TerraUSD (UST) on the Anchor protocol experienced a sharp decline after it was de-pegged and the LUNA token collapsed. As a result, the crypto lending company halted all trading activity and paused withdrawals, citing a liquidity crisis.

Algorand Foundation Outlines Huge Exposure: 

The majority of the investments locked on the site, according to the Algorand Foundation, were “locked, short term deposits,” but are no longer accessible because Holdnaut has stopped allowing withdrawals.

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The $35 million represents less than 3% of the Foundation’s assets, according to the Algorand Foundation, which also stated that they “do not expect [any impending] operational or financial concerns” and that the money “was a surplus to day-to-day necessities.”

Hodlnaut, a troubled cryptocurrency lender, is currently under interim judicial management to address its liquidity problems.

Corporate companies in Singapore are subject to interim judicial management for debt restructuring to safeguard and defend assets before legal action is taken.

To protect Hodlnaut’s assets until further legal action can be taken, the Singapore High Court appointed the Algorand Foundation’s nominees Angela Ee and Aaron Loh of EY Corporate Advisors as the Interim Judicial Managers for Hodlnaut on August 29.

 

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