Hodlnaut withdrawals: When will transactions freeze end?

Crypto lender to withdraw licence application for providing digital payment token services

A stop sign in front of Dom Cathedral, Cologne, Germany                                 
Market conditions have led crypto lender Hodlnaut to halt withdrawals, token swaps and deposits – Photo: Getty Images
                                

Crypto lender Hodlnaut has halted withdrawals, token swaps and deposits due to “recent market conditions”.

In a statement issued today, it said it wanted to “sincerely apologise” to its customers for this “disappointing news”.

Hodlnaut explained it had taken the difficult decision to “focus on stabilising our liquidity and preserving assets, while we work to find the best way to protect our users’ long-term interests”.

Following the announcement, the Singapore-based firm has told the Monetary Authority of Singapore (MAS) of its intention to withdraw its licence application. Due to this, Hodlnaut will not be “providing regulated digital payment token (DPT) services” and has ceased all borrowing and lending services.

It comes as Robinhood, the US financial services company, that facilatates commission-free trades of stocks, exchange-traded funds (ETFs) and cryptocurrencies via a mobile app, described the current situation as a “broad crypto market crash”. Earlier this year, two other crypto lenders Celsius Network and Voyager Digital filed for bankruptcy.

Working on a recovery plan

Hodlnaut said it was actively working on a “recovery plan” and it hoped to provide updates on the situation as soon as possible. The business is consulting with Singapore law firm Damodara Ong “on the feasibility and timelines of its intended execution plan” and is “strategising its recovery plan with its users’ best interests in mind”.

To “address all user queries”, Hodlnaut has shut down all of its social media platforms except for its Twitter, Telegram and its customer support email address to consolidate its efforts in giving accurate information to its customers.

Hodlnaut said it will issue another update regarding this matter on 19 August 2022.

Withdrawals freeze will be in place for some time

Hodlnaut added that it could not reveal when withdrawals will resume, but stated this “will not be a short process”.

However, throughout this period the crypto lender said customers can still access their accounts and view their balance. Also, Hodlnaut will continue to pay out interest earned according to its rates every Monday. The company said it was doing this so it “can balance the need to be fair to users and minimise its liabilities”.

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