Algorand Foundation Declares $35M Exposure to Troubled Crypto Lender Hodlnaut
Hodlnaut was placed under Interim Judicial Management after suspending withdrawals from its platform in August.
Algorand Foundation, a nonprofit body that supports the Algorand blockchain and oversees its development, declared a $35 million exposure to beleaguered crypto lender Hodlnaut.
In a statement on its website, posted over the weekend, the foundation said the funds represented less than 3% of its total assets and it did not expect any “operational or liquidity issues” to arise as a result of the exposure.
Algorand joins a small cohort of blockchain operators affected by the crypto market downturn of recent months. A CoinDesk investigation in July found the development labs behind Moonbeam and Khyber Network are owed over $27 million by now-defunct crypto fund Three Arrows.
Singapore-based Hodlnaut was one of several crypto companies that succumbed to the pressures of the downturn. It applied to be put under judicial management on Aug. 13, five days after it froze withdrawals. Judicial management is a form of debt restructuring that sees an entity manage the business, property and assets of a distressed company. During the process the company is protected from legal proceedings from third parties.
Algorand said it invests a portion of its surplus treasury capital to generate yield for Algorand ecosystem development, with a majority of the investment consisting of locked, short-term deposits that became unavailable following Hodlnaut's suspension of withdrawals.
Algorand said it was pursuing all legal remedies to maximize asset recovery.
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