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09/08/2022

Withdrawals Suspended By Singapore-Based Cryptocurrency Lender Hodlnaut




Withdrawals Suspended By Singapore-Based Cryptocurrency Lender Hodlnaut
Hodlnaut, a Singapore-based cryptocurrency lender and borrower, announced that it had ceased withdrawals, swaps, and deposits, the latest symptom of stress in the cryptocurrency business.
 
In addition, the crypto lender announced that it would withdraw its application for a license from the Monetary Authority of Singapore (MAS) to provide digital token payment services, for which it gained preliminary permission in March.
 
According to a MAS representative, the approval was revoked in response to the request.
 
Hodlnaut stated that the decision was made "due to recent market conditions" in order to "concentrate on maintaining our liquidity and protecting assets."
 
The company is the latest in a long line of crypto players to face difficulties as a result of a strong sell-off in markets that began in May with the collapse of two coupled coins, Luna and TerraUSD.
 
Other notable failures include US-based crypto lender Celsius and Singapore-based fund Three Arrows Capital, both of which declared bankruptcy last month. According to court documents, Hodlnaut is one of Celsius' institutional clients.
 
Singapore, a major crypto and blockchain hub in Asia, has seen several crypto startups fail in recent months.
 
Vauld, a Singapore-based crypto loan and trading platform, froze withdrawals in early July, while Zipmex, a Southeast Asia-focused crypto exchange, suspended withdrawals later that month, though they have since resumed.
 
"Digital payment token service providers licensed by MAS under the (Payment Services) Act are regulated for money laundering and terrorism financing risks as well as technology risks. They are not subject to risk-based capital or liquidity requirements, nor are they required to safeguard customer monies or digital tokens from insolvency risk," said an MAS spokesperson.
 
This is why "MAS has been consistently telling the general public that dealing in cryptocurrencies is highly risky," they said, adding that the recent upheaval in the cryptocurrency market has had "very minimal" spillover into Singapore's domestic financial system.
 
Hodlnaut did not react to a comment request.
 
(Source:www.livemint.com)

Christopher J. Mitchell

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