Hodlnaut reported a "hole" in the balance sheet for $193 million

As of August 8, 2022, the Hodlnaut crypto lending platform had a capital shortfall of $193 million, according to documents filed for a bankruptcy court in Singapore, writes The Block.

As of the reporting date, the company's liabilities were valued at 391 million SGD (~$281 million), assets at 122 million SGD (~$88 million). In other words, for every $1 in debt, Hodlnaut could only pay back 31 cents.

The company's creditors are 17,513 persons. At its peak in May, the firm's AUM was $750 million.

The platform converted $317 million into TerraUSD (UST) for high yields through the Anchor protocol, resulting in a loss of $189.7 million.

Between 14 and 15 July Hodlnaut encountered“larger than usual outflow of client funds” in the amount of $150 million. The platform’s reserves in bitcoin and Ethereum experienced a negative revaluation amid deteriorating market conditions.

The company is considering a "limited exit" option for users if they agree to a refund of 25 cents for every $1 of commitments. Hodlnaut offered such an option, in particular FTX.

"That would probably be a better option thanliquidation. The latter will take a longer period of time and may result in a smaller refund given the fees required for the procedure and the current asset-to-liability ratio.”- the document says.

Hodlnaut expects to go through a reorganization and return to profitability, given the positive operating history from its founding in 2019 to the collapse of Terra.

Terra's Death Spiral: How and Why LUNA and UST Failed

As a reminder, on August 8, the platform suspended withdrawals, swaps and deposits of tokens.

On August 16, Hodlnaut applied to the court for protection from creditors.

Previously, other Singaporean firms Vauld and Zipmex came up with a similar initiative.

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