Hodlnaut, a Singapore-based crypto lender, has suspended withdrawals, swaps, and deposits due to market conditions, becoming the latest victim of the cryptocurrency industry's ongoing turmoil. The company, which previously received in-principle approval for a payment services license from the Monetary Authority of Singapore (MAS), has withdrawn its application. MAS has revoked the approval and emphasized that crypto service providers in Singapore are regulated for money laundering and terrorism financing risks but not subject to risk-based capital or liquidity requirements.
Singapore Crypto Lender Hodlnaut Suspends Withdrawals Amid Market Turmoil
Hodlnaut, a prominent Singapore-based cryptocurrency lender and borrower, has become the latest victim of the ongoing turmoil in the crypto industry, suspending withdrawals, swaps, and deposits. The company cited "recent market conditions" as the catalyst for its decision, emphasizing its focus on "stabilizing our liquidity and preserving assets."
This suspension marks Hodlnaut's withdrawal from its application for a license from the Monetary Authority of Singapore (MAS) to provide digital token payment services. The company had initially received in-principle approval for the license in March, but MAS has since rescinded it at Hodlnaut's request.
Hodlnaut's predicament reflects the broader challenges currently facing the crypto sector, characterized by a sharp sell-off in markets since May. Notably, the collapse of Luna and TerraUSD precipitated this downturn, triggering a domino effect that has impacted numerous crypto companies, including U.S. lender Celsius and Singapore-based fund Three Arrows Capital, both of which filed for bankruptcy last month. Court filings have identified Hodlnaut as one of Celsius' institutional clients.
Singapore, widely recognized as a major hub for crypto and blockchain in Asia, has witnessed several crypto companies encountering difficulties in recent months. Vauld, a Singapore-based crypto lending and trading platform, suspended withdrawals in early July. Zipmex, a Southeast Asia-focused crypto exchange, followed suit later that month, although it has since resumed withdrawals for certain products.
The Monetary Authority of Singapore has taken a cautious approach towards the crypto industry, emphasizing the inherent risks associated with digital payment token services. Licensed by MAS under the Payment Services Act, these providers are subject to regulations addressing money laundering, terrorism financing, and technology risks. However, they are not subject to risk-based capital or liquidity requirements and are not required to safeguard customer monies or digital tokens from insolvency risk.
MAS has consistently cautioned the public about the highly hazardous nature of cryptocurrency transactions and has reiterated that the recent market turmoil has had limited spillover effects on Singapore's domestic financial system. Hodlnaut has not responded to requests for comment.
The suspension of Hodlnaut underscores the ongoing volatility and uncertainty in the crypto industry. Market conditions continue to pose challenges for crypto companies, and regulatory scrutiny remains a significant factor shaping the landscape.
