The Great Lies of Hodlnaut
Hodlnaut is yet another fallen piece in a string of fintech companies to have bitten the dust, "halting withdrawals, token swaps and deposits with immediate effect due to recent market conditions" on 8th August 2022. Why would a seemingly safe company, with stringent risk management practices, suddenly collapse out of the blue, unless, of course, they were lying to their investors all along? Unfortunately, this seemed to be the sad case of Hodlnaut, the ugly truth of which has now unfolded.
When Terra was collapsing in May, concerned users of the Hodlnaut lending platform asked whether the firm had any terra/ UST exposure. CEO JT wrote on Twitter, "Hodlnaut as a firm did not take any losses on UST, users who held/bought UST on our platform did". Their sodia manager wrote, "[Holdnaut] had 0 company exposure to [Anchor Protocol]", referring to the Terra-based lending protocol. However, the affidavit from legal proceedings surrounding Hodlnaut now show that Hodlnaut has been blatantly lying to its investors in a disgustingly desperate attempt to salvage what is left of the company despite knowing that it had suffered immeasurable losses from the Terra Luna UST collapse, to which Hodlnaut has refuted any affiliation. JT's tweets have now been made private on Twitter for obvious reasons.
To summarize salient points from the affidavit
Hodlnaut, through Hodlnaut HK, staked USTC in the Anchor Protocol
Between 9 to 11 May 2022, USTC lost its peg
At that time, Hodlnaut HK's total exposure to USTC was 317M USTC. Hodlnaut only managed to exit USTC at $0.42, realizing a total loss of 189.7M USD.
As a result of mounting debts, Hodlnaut decided to halt withdrawals on 8th August 2022.
Indeed, such blatant lies have cost Hodlnaut and its investors (now creditors) an expensive lesson. Indeed, it is shameful corporations like these that give crypto a bad name!
