The Algorand Foundation Revealed That It Has A $35M Exposure In USDC To Crypto Lender Hodlnaut

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Last Updated on September 12, 2022 by Bitfinsider

An Algorand Foundation report indicated $35 million exposure in USDC to Hodlnaut, a troubled crypto lender based in Singapore that halted withdrawals last month.

Based on the firm’s estimates, that figure represents less than 3% of Algorand Foundation’s assets, and the firm does not expect a liquidity or operational issue as a result.

The foundation said: “As part of the Foundation’s mission, from time to time, we invest a portion of our surplus treasury capital to generate yield for the purpose of Algorand ecosystem development, and these funds were invested for that purpose.”

On August 8 due to liquidity issues, Hodlnaut stopped accepting client withdrawals. The Terra ecosystem breakdown resulted in significant losses for the company, according to affidavits. To transfer on high payouts to its clients, Hodlnaut has deposited over $317 million in terraUSD (UST), the collapsed stablecoin, in Anchor Protocol on Terra. The declaration claims that in May, Terra’s stablecoin UST abruptly de-pegged from the dollar, causing Hodlnaut losses of $189.7 million.

According to the Algorand Foundation, it is using all available legal options to recover Hodlnaut’s assets as much as possible.

The Singapore High Court nominated Angela Ee and Aaron Loh of EY Corporate Advisors on August 29 to serve as the temporary judicial managers of Hodlnaut, according to the foundation. They were Algorand’s nominations.


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