Hodlnaut Cuts Staff as Terra Exposure Is Revealed
The insolvent crypto lending company is axing staff as it continues its recovery attempts.
Key Takeaways
- Hodlnaut published an update on its recovery efforts and its judicial management process today.
- A leaked portion of proceeding documents reveal that the company had at least indirect exposure to Terra.
- Hodlnaut also revealed that it will lay off employees and change certain rates to save on expenses.
Share this article
Hodlnaut’s judicial management process has revealed exposure to Terra, while the firm has decided to lay off employees.
Hodlnaut Proceedings Continue
Hodlnaut is cleaning house as it continues its recovery attempts, laying off 80% of its workforce.
The crypto lending firm initially froze user withdrawals on August 8. It then initiated a judicial management request on August 16, which will grant the company protection from legal claims as a court-appointed officer takes over its management.
Today, the firm said that this process is moving forward, as its legal representation attended the first case conference for its judicial management application on August 18.
Hodlnaut said its application to be placed under interim judicial management would be heard on August 22. This process will run parallel to its judicial management application, which has a hearing date scheduled for August 30.
Though access to proceeding documents is restricted to customers, details from the proceedings have been leaked. Hodlnaut said months ago that it had no direct exposure to the recently collapsed TerraUSD (UST). However, the leaked documents suggest it had staked TerraUSD Classic (USTC) through Anchor Protocol.
“Hodlnaut Pte. Ltd has no direct exposure to UST,” a company member wrote. “Indirectly, however, there is impact of the UST depeg on Hodlnaut Pte. Ltd.” The odd phrasing of the statement leaves much unclear, as holding assets in Anchor Protocol would have required exposure to UST (now USTC).
Those investment activities caused Hodlnaut to lose $189.7 million, according to the text of the filing.
The company also announced today that it has laid off 80% of its workforce to reduce expenses.
Now, just 40 employees remain at the company. Hodlnaut says that the employees who remain on the team are the “necessary headcount in order for us to carry out key functions.”
Hodlnaut additionally said it would reduce burn rates and change all open-term interest rates to 0% as part of its attempts to regain liquidity. This policy will take effect beginning on August 22.
Finally, Hodlnaut indicated that there are proceedings between it and the Singapore Attorney-General and Singapore Police Force. It said it is “unable to disclose any information in this regard.”
The company says it will likely post its next update on August 23.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.
Share this article
