The crash of Terra Luna in May had caused the dread. Rightly so, as the dreaded domino effect was so extensive. Latest to date whose damage can be quantified, the crypto lending platform Hodlnaut, based in Singapore and also operating in Hong Kong. She would have suffered loss of almost $190 million, because of its exposure to the Terra ecosystem which it would have largely minimized.
Overexposure to the Terra Luna ecosystem: $190 million loss for Hodlnaut
After behemoths Celsius, Three Arrows Capital and Voyager Digital, an interim court report reveals that crypto lender Hodlnaut lost an estimated $189.7 million in the sinking of Terra Luna. The document, relayed by Bloombergfurther states that administrators would have “minimised” the extent of their exposure native token LUNA and stablecoin UST “both during the period before and after the Terra/Luna collapse”.
As a reminder, when the company suspended fund withdrawals last July, it blamed poor market conditions and said it had chosen this option to stabilize liquidity and preserve assets. She had shortly after declared a deficit of $193 millionand therefore requested legal protection to avoid liquidation.
As we know, crypto lenders in the hot seat have rarely shown adequate transparency since the Terra episode, not only with partial, biased, if not misleading communication, but also by engaging in manipulation or concealment of documents. .
Thereby, the report mentions the removal of 1,000 documents from Hodlnaut’s Google workspace that could have helped shed light on the actions of the company. Acting forensic officials have also failed to obtain “key documents” relating to the company’s Hong Kong branch, which owes its Singapore branch about $58 million.
Additionally, the review revealed at least one suspicious transaction just before the freeze on customer withdrawals, including a withdrawal of approximately US$550,000 in Singapore dollars. From there to consider a blow à la Alex Mashinsky who, with his right arm, would have cashed in no less than $17 million in cryptojust before Celsius is declared bankrupt, there is only one step… if nothing comes to justify the transaction and its destination.
Singapore wants new discriminatory and infantilizing provisions to ensure user protection
The fact is that the company’s situation, which not only seriously affected its customers, but also its workforce, which shrunk by 80% “to reduce expenses” shortly after withdrawals closed, turns out to be somewhat inextricable. And all the more complex to untie as the founder of Hodlnaut, Simon Lee, challenges the current interim judicial director, the firm Ernst & Young.
This umpteenth “case” is probably not for nothing in the desire of the Singapore regulatory authority to tighten the screws.
In particular, it offersprohibit the use of credit cards for retail investors tempted by the purchase of cryptos. A measure envisaged in the name of consumer protection, and which will be discussed with industry players before possible adoption.
Do not venture anyhow in the ecosystem, train yourself, and rely instead on a recognized and reliable player whose history speaks for him. Finax invites you for more security to register on the Bytbit exchange (commercial link).