SG Hodlnaut Stakers Reveal Why They Didn’t Withdraw Ahead of Freeze
Whilst hindsight is notably cleverer than foresight, Hodlnaut stakers arguably had plenty of warning ahead of the platform’s move to freeze withdrawals.
On the eve of Singapore’s National Day, Hodlnaut announced it would be “halting withdrawals, token swaps and deposits with immediate effect,” citing “recent market conditions.”
Read more: Hodlnaut Pauses Customer Withdrawals
Prior to Hodlnaut’s announcement, a series of crypto platforms including CoinFLEX, Celsius, Babel Finance, Finblox and Voyager Digital froze withdrawals amid the 3AC fallout and crypto winter. Whilst these crypto platforms all differ from each other, as well as from Hodlnaut, it seemed apparent that the humongous returns offered by staking platforms was no longer sustainable.
Although Hodlnaut had zero exposure to 3AC, Hodlnaut itself was hardly the cleanest platform either. In June, Blockhead reported how Hodlnaut suffered “severe losses” following the LUNA fallout, with substantial UST transactions to Hodlnaut’s account.
Read more: Hodlnaut is Too Flawed to HODL – Here’s Why
Despite Hodlnaut’s losses and staking platforms tumbling like dominos, investors still remained loyal to the platform. One young Redditer revealed they had over US$10,000 in USDC on Hodlnaut, stating “it may be small to you guys but it’s quite a sum for me as I’m a uni student.”
Meanwhile, on a Hodlnaut Telegram chat, stakers revealed why they remained confident in Hodlnaut. One group participant who “lost a shitload of money in crypto” said they weren’t “pro Hodlnaut” but just “optimistic that they weren’t going to screw everyone over by following suit with the other lending platforms by halting withdrawals, was certainly wrong.”
The user explained that he remained optimistic for the “same reason that brought me to HN in the first place – through my research, I couldn’t find a single bad thing about HN and no one had any issues, kind of seemed like this small little hidden gem. So I joined the TG and had a conversation with CT (who has been name-dropped countless times on reddit) and I felt reassured that my funds were safe.”
Dear users, we regret to inform you that we will be halting withdrawals, token swaps and deposits immediately due to recent market conditions. We have also withdrawn our MAS licence application. Here is our full statement https://t.co/5KfHUBzWsn Our next update will be on 19 Aug.
— Hodlnaut (@hodlnautdotcom) August 8, 2022
Celsius’ fate also didn’t deter the Telegram user from Hodlnaut. “After celsius halted withdrawals, they said they weren’t going to do the same. So I felt okay, but decided to withdraw later because I can always deposit funds back in at a later date when things settle down a bit.”
Others admitted to ignorance or negligence for leaving their money in Hodlnaut. “I forgot I had crypto there to be frank,” one Telegram user who lost under $10,000 said. “I am a crappy investor myself.”
Another simply said it was “ignorance that caused me to use Hodlnaut.”
Hodlnaut is the latest Singapore-based crypto company to run into financial troubles amid the market downturn.
In July, Vauld, another Singapore-headquartered crypto lending platform, also suspended withdrawals. Later that month, crypto trading platform Zipmex temporarily halted withdrawals, citing “volatile market conditions” and the need to “maintain the integrity” of the platform. The company has since filed for bankruptcy protection in Singapore.
Some Hodlnaut executives, including its founders, have deleted their LinkedIn profiles. They have also deleted their Telegram accounts and private Twitter account, while Hodlnaut’s official website has removed its “Team” section originally showing its founders’ information. Its main YouTube channel has been deactivated, and its official Reddit page for Hodlnaut is now private.
The company has not responded to Blockhead’s request for comments at the time of writing.