The crypto world has been in turmoil for months now, and this has caused many firms and blockchains to fall by the wayside. It was no different for crypto lender Hodlnaut today, since the Hodlnaut team announced a full pause on all withdrawals, deposits, and swaps. In a blog post, the team stated:
"To all users, we regret to inform you that we will be halting withdrawals, token swaps and deposits with immediate effect. We have reached this difficult decision due to recent market conditions."
Hodlnaut's business is very similar in structure to Celsius, which involves the concept of giving up your crypto private keys to allow the centralized firm (in this case Hodlnaut), to borrow it and deliver you yield. In fact, to one's surprise, Hodlnaut was an institutional client of Celsius. The problem, of course, is that in the event of financial disaster (which is what just occurred), they get to keep your hard-earned crypto.
A Singapore-based firm established in 2019, Hodlnaut aimed from the start to be:
"A crypto-borrowing and lending platform that helps investors improve the return on their assets. Cryptocurrency investors can now earn interest on their crypto and unlock its full value via yield farming, instead of only profiting from off-price increments."
This is a very generic set of mission statements, that, like many other suspicious companies involved in the crypto industry, goats unsuspecting investors into depositing personal savings onto the platform. All these factors present in Hodlnaut are the common hallmarks of a Ponzi scheme.
Bankruptcy is likely
Also in the announcement, Hodlnaut announced that they were withdrawing their Singapore license (MAS) to officially do business in digital token swaps. The most important part, however, was the announcement all lending and swapping operations ceased, adding that a recovery plan was in development. Bankruptcy proceedings are likely around the corner.