Crypto firm Hodlnaut lays off employees to reduce spending

Investors and firms associated with this segment have suffered huge losses due to the selloff in the crypto market for the past few months. Facing financial difficulties, crypto lending firm Hodlnaut has laid off around 40 employees to reduce its expenses. The Singapore authorities are also taking action against this firm.

Hodlnaut said in a blog post that it is working to improve its liquidity position, reduce costs and stay afloat in Singapore. The firm has laid off about 80 percent of its staff. “Action is pending between the firm and Singapore’s attorney general and the police,” Hodlnaut reported. The firm has applied for management under the court. If permitted, the power to take all decisions related to the firm will be with the manager to be appointed by the court. This will also help Hodlnaut avoid selling his holdings in Bitcoin and Ether at current prices. The prices of these cryptocurrencies are well below last year’s highs.

The firm said that it understands the need of users to get funds quickly. For this, it plans to allow users to withdraw their initial deposit and deposit interest at a discounted amount. However, for this users will have to wait as the firm has applied for management under the court. Another crypto lending firm Celsius Network had also recently banned the transactions of customers. The firm’s decision to freeze transactions to clients is being probed by the regulators. Celsius had said that due to the poor condition of the crypto market, it is prohibiting withdrawal and transfer between accounts.

The US Securities and Exchange Commission (SEC) had also sought information from the firm in this regard. Joseph Borg, director of the Alabama Securities Commission, said, “I am concerned that the firm’s clients, including retail investors, may need to redeem their assets but they may. This could add to their financial difficulties.” Many firms in this segment are cutting their workforce to reduce costs. Coinbase, one of the major crypto exchanges, also decided to reduce its workforce by 18 percent. The exchange said that in this difficult phase of the industry, it has taken this step to reduce costs.

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