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Singapore-based crypto lender Hodlnaut suspends withdrawals

Representations of the virtual currencies Ripple, Bitcoin, Etherum and Litecoin are seen on a PC motherboard in this illustration picture, February 14, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

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HONG KONG, Aug 8 (Reuters) – Hodlnaut, a Singapore-based cryptocurrency lender and borrower, has suspended withdrawals, swaps and deposits, the company said on Monday, the latest sign of stress in the cryptocurrency industry.

The crypto lender also said it would withdraw its application for a license from the Monetary Authority of Singapore (MAS) to offer digital token payment services, for which it received in-principle approval in March.

A MAS spokesperson said it had withdrawn its approval following the request.

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Hodlnaut said the move was “due to recent market conditions” and was “to focus on stabilizing our liquidity and preserving assets”.

The company is the latest in a string of crypto players globally to run into trouble following a sharp sell-off in markets that began in May with the collapse of two linked tokens, Luna and TerraUSD. read more

Other high-profile failures include US crypto lender Celsius and Singapore-based fund Three Arrows Capital, both of which filed for bankruptcy last month. read more

Hodlnaut was named as one of Celsius’ institutional clients, according to court documents.

Singapore, a major crypto and blockchain hub in Asia, has seen several crypto companies run into trouble in recent months. read more

Vauld, a Singapore-based crypto lending and trading platform, suspended withdrawals in early July, and later that month Zipmex, a Southeast Asia-focused crypto exchange, suspended withdrawals but has since resumed them for some products. read more

“Digital payment token service providers licensed by MAS under the (Payment Services Act) are regulated for money laundering and terrorist 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 money or digital tokens from insolvency risk,” a MAS spokesperson said.

They said this was one reason why “MAS has continuously reminded the public that cryptocurrency trading is very dangerous,” adding spillovers to Singapore’s domestic financial system from the recent turmoil in the cryptocurrency market have been “very limited”

Hodlnaut did not respond to a request for comment.

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Reporting by Alun John in Hong Kong, Chen Lin in Singapore and Elizabeth Howcroft in London; Editing by Toby Chopra and Louise Heavens

Our standards: Thomson Reuters Trust Principles.

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