Asian Crypto lender Hodlnaut has announced the halting of withdrawals on its platform effective immediately. The firm shared this development in its blog post.
In the announcement, Hodlnaut cited the market conditions as reasons for the decision. It also said it is restrategizing to stabilize its liquidity and preserve its assets.
According to the lender, halting withdrawals will afford it room to explore potential restructuring options and recovery plans with its legal advisers.
Forging ahead, Damodara Ong LLC, a Singaporean law firm works on a user-focused recovery plan. It said it would provide updates and details of the plan as soon as possible. It has therefore scheduled August 19 for its next update.
In addition to halting withdrawals, the crypto lender also retrieved its license application from Singaporean regulators, the Monetary Authority of Singapore (MAS). It can no longer provide regulated digital payment token (DPT) services. The firm has also ceased all borrowing and lending services.
While the firm isn’t sure when it’ll restore withdrawals, customers can still access the platform to view their balance.
Troubled crypto firms halting withdrawals
In the previous months, several lenders have halted withdrawals on their platforms. This was a result of the market downturn triggered by the Terra-Luna crash.
Crypto lenders such as Celsius, Babel Finance, Vauld, Zipmex, and Voyager have all opted to halt withdrawals to help them restructure. A number of these affected firms have since filed for bankruptcy protection.
On the brighter side, Voyager said it will resume cash withdrawal on its platform starting from August 11 after approval from the court.
The crypto lender received approval from the US Bankruptcy Court to return about $270 million in fiat currency to its customers. The funds are held in a For Benefits of Customers FBO account at the Metropolitan Commercial Bank to its customers.
Although the lender is open to bids for a potential takeover, it has turned down that of FTX’s Investment arm Alameda Ventures. Voyager says going forward with the deal would harm its customers as there was nothing to gain from the arrangement.