Hodlnaut in a $193 Million Hole

Hodlnaut in a $193 Million Hole

7 months ago

Yet another CeFi lender reports a massive financial shortfall as a result of UST exposure.

Hodlnaut in a $193 Million Hole

UST may have collapsed months ago, but its aftershocks are still being felt in the industry.

Hodlnaut was the latest to halt withdrawals over financial problems. The CeFi lender has now revealed the extent of its financial problems, which amount to nearly $200 million. An affidavit filed last week, following Hodlnaut's application to be placed under judicial management, detailed the company's inner workings.
According to an update on the Hodlnaut blog, the lender has laid off 80% of its staff and retains only a minimal workforce for operations. The affidavit lays out liabilities of 391 million Singaporean dollars (SGD), which translates to $281 million, and assets worth SGD 122 million, approximately $88 million. In total, Hodlnaut is in a $193 million hole, with an asset-to-debt ratio of 0.31. It filed for creditor protection in Singapore on August 16.

Furthermore, the affidavit details that Hodlnaut had $317 million invested in UST and incurred a $190 million loss due to this investment. Its BTC and ETH holdings also dropped in value following the market downturn. Hodlnaut's financial distress impacts 17,513 users.

According to the affidavit, Hodlnaut is exploring a debt haircut that would return users 25 cents for every dollar invested. It reads:

"This would likely be a better option than liquidation as the latter would take a longer period of time, and likely result in a lower return than 25 cents on the dollar given the fees involved in a liquidation situation and given the present cryptocurrency asset to debt ratio of the Hodlnaut Group."

According to The Block, Hodlnaut has not yet entered liquidation. The company is yet to comment on the contents of the affidavit.
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