The Algorand Foundation informs its community that they lost $35 million USDC exposure to Holdnaut. Luckily the lost assets are not big enough to cause operational or liquidity issues on Algorand. As it was less than 3% of the Foundation’s assets and a portion of the surplus of the Algorand treasury.
What is Hodlnaut?
Hodlenaut is a Singapore-based crypto lending platform that provided financial services for individual investors. But after the cryptocurrency crash of June they declared a risk of insolvency and were placed under Interim Judicial Management after suspending withdrawals from its platform on August 8, 2022. On their website they stated the following;
“We have since informed the MAS (Monetary Authority of Singapore) of our intention to withdraw our licence application. Hodlnaut is therefore no longer providing regulated digital payment token (DPT) services, i.e., our token swap feature. For the avoidance of doubt, Hodlnaut will also cease all borrowing and lending services”.
What happens next?
As the majority of the Foundation investment is locked or unavailable following Hodlnaut’s suspension of withdrawals. The Algorand Foundation is pursuing all legal remedies to recover those assets but the lack of risk assessment and the decision that was made to place the foundation money on a centralized platform is definitely not good advertisement.