The non-profit organization behind Algorand’s blockchain technology infrastructure development – The Algorand Foundation – has confirmed a $35 million exposure to Hodlnaut.
In addition, it said that it is taking all legal measures to maximize asset recovery from the doomed crypto lender.
- Despite the gap in the balance sheet, the organization does not expect to raise any operational or liquidity issues.
- The Algorand Foundation, in an official announcement, said these funds were in excess of daily needs, and represented less than 3% of its assets.
“As part of the mission of the Foundation, we from time to time invest some of our surplus capital to generate returns for the purpose of developing the Algorand ecosystem, and these funds have been invested for this purpose.”
- The majority of Algorand’s investments consist of short-term locked deposits, which became unavailable after Hodlnaut announced a halt to withdrawals and deposits on August 8.
- Hodlnaut’s solution was to publish more than $300 million in TerraUSD (UST) on the Anchor Protocol, a service that guarantees a maximum return of 20% on a terrestrial treasury stake.
- The collapse of the Terra ecosystem token has proven disastrous for the platform.
- In an effort to stay afloat due to its liquidity crunch, Hodlnaut has laid off about 80% of its workforce. The company also lowered interest rates to 0% APR as part of its cost-cutting efforts.
- Hodlnaut was placed under temporary legal supervision by the Singapore Supreme Court, which temporarily shielded her from third-party legal action and allowed her to rehabilitate.
The Algorand Foundation confirmed after being exposed to Crypto Lender Hodlnaut for $35 million for the first time on CryptoPotato.