The latest indication of strain in the cryptocurrency market is the suspension of withdrawals, swaps, and deposits by Hodlnaut, a Singapore-based bitcoin lender and borrower.
Hodlnaut also withdrew its request for a license from the Monetary Authority of Singapore, despite the fact that the central bank had given it in-principle permission in March.
The organization is the most recent in a long line of cryptocurrency lenders to falter this year due to market pressure, with Celsius Network and Voyager Digital also seeking bankruptcy protection. From more than $3 trillion in November, the entire market valuation of cryptocurrencies has fallen to a little over $1 trillion today.
In recent months, a number of cryptocurrency startups have encountered challenges in Singapore, a significant hub for blockchain and cryptocurrency in Asia.
“MAS has been continuously warning the general public that trading in cryptocurrencies is exceedingly risky.
MAS Spokesperson
Early in July, the Singapore-based cryptocurrency loan and trading platform Vauld stopped allowing withdrawals. Later that month, the Southeast Asia-focused cryptocurrency exchange Zipmex also stopped allowing withdrawals, but it has subsequently allowed them for specific goods.
“Hazards associated with money laundering and terrorist funding, as well as technological risks, are controlled for digital payment token service providers licensed by MAS under the (Payment Services) Act. They are not obligated to protect client funds or digital tokens from bankruptcy risk or to maintain risk-based capital or liquidity requirements “, a MAS spokeswoman stated.
They noted that the “extremely minimal” impact of the current upheaval in the cryptocurrency market on Singapore’s domestic financial system was due to the fact that “MAS has been continuously warning the general public that trading in cryptocurrencies is exceedingly risky.”
The bankruptcy of cryptocurrency hedge fund Three Arrows Capital, which had billions of dollars worth of exposure to several firms in the crypto world, was one of the major factors contributing to the market decline.
In June, Hodlnaut made an announcement stating that it did not have “any exposure or loans” with Three Arrows Capital or Celsius.
A schedule for a strategy to safeguard user assets is now being discussed between the corporation and the legal firm Damodara Ong, which is located in Singapore.
On the company’s LinkedIn profile, it is said that the company manages assets worth more than 500 million dollars. Hodlnaut is planning to release an update on August 19th.
Read here about all the crypto companies that have gone bankrupt in recent months.
Image: “darren-with-axe” by Darren and Brad is licensed under CC BY-SA 2.0.
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