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The Algorand Foundation has admitted that it has $35 million worth of exposure to Hodlnaut
The foundation said its investment is in the form of USDC coins now locked in the platform
Hodlnaut ceased withdrawals last month after running out of liquidity
The Algorand Foundation, which oversees the Algorand blockchain protocol, has admitted that it has a $35 million exposure to troubled exchange Hodlnaut, but has said it will do all it can to get its money back. The foundation made the admission in a statement yesterday, saying that the exposure comes in the form of USDC tokens, the majority of which is in the form of “locked, short-term deposits”. Hodlnaut was recently placed under Interim Judicial Management having suspended withdrawals last month following liquidity problems.
35 Million USDC Locked on Platform
Hodlnaut had become the latest casualty of the crypto contagion that started with the Luna/Terra USD collapse, ceasing withdrawals from its platform on August 8th, but this action has led directly to the latest victim being identified – the Algorand Foundation.
The foundation said in its statement that the 35 million USDC invested into Hodlnaut was “a portion of our surplus treasury capital” which it invested in the Singaporean exchange “to generate yield for the purpose of Algorand ecosystem development”. These funds are now locked in Hodlnaut after the company pulled down the shutters last month, with representatives from EY Corporate Advisors now tasked with preserving capital on the exchange.
Money Isn’t Critical to Operations
The Algorand foundation was quick to point out that the funds currently stuck in Hodlnaut aren’t critical to operations:
These funds were surplus to day-to-day requirements and represent less than 3% of the Foundation’s assets, and we do not anticipate operational or liquidity issues due to this action.
The foundation signed off its announcement by saying that it is “pursuing all legal remedies to maximize asset recovery and will continue to do so”, although it isn’t known how much money Hodlonaut has left compared to how much it owes its creditors, investors and customers.
The post Algorand Foundation Admits $35 Million Hodlnaut Exposure appeared first on FullyCrypto.