A Singapore-based cryptocurrency borrower and lender, Hodlnaut, has suspended withdrawals, swaps, and deposits, the company said on Monday. This suspension can be taken as the latest sign of stress in the cryptocurrency industry.
Hodlnaut also said it would withdraw its application for a license from the Monetary Authority of Singapore (MAS) to facilitate digital token payment services. The crypto lender had received it in principle approval in March. A MAS spokesperson said it had canceled the approval following the request.
Hodlnaut said the reason behind the move was current market conditions. The crypto lender wants to focus on stabilizing their liquidity and preserving assets. Hodlnaut is the latest in the line of global crypto players to face financial crises following a sharp sell-off in markets. It started in May with the collapse of two paired tokens, Luna and TerraUSD.
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US crypto lender Celsius and Singapore-based fund Three Arrows Capital also filed for bankruptcy last month. Hodlnaut was recognized as one of Celsius’ institutional clients. Singapore, a major crypto and blockchain center in Asia, has seen several crypto companies run into a crisis in recent months.
Vauld, a Singapore-based crypto lending and trading platform suspended withdrawals during July. Later that month, Zipmex, a Southeast Asia-focused crypto exchange, suspended withdrawals. It has recently resumed withdrawals for some products.
A MAS spokesperson said that digital payment token service providers that MAS licenses under the Payment Services Act are regulated for terrorism and money laundering financing risks as well as technical risks. They are not subject to risk-based liquidity or capital requirements. Nor are they required to safeguard customer digital tokens or monies from insolvency risk.