The drama Luna (Terra) makes a new victim: Algorand has lost 35 million
Domino effect! – Decidedly, this year 2022 will be marked by a large number of crypto exchanges in great distress. The spectacular and dramatic fall of theLuna ecosystem caused an earthquake whose repercussions continue to be felt. Hodlnaut suffered greatly of the collapse of Terra stablecoin and passes from creditor to debtor in an uncontrollable domino movement. The Algorand Foundation finds itself in turn impacted by unreimbursed debts which weigh on its financial balance sheet. We will explain everything to you.
Hodlnaut is in turmoil because of Terra Luna…
The pattern is unfortunately classic and resembles many other situations described over the past few months. The Asian platform Hodlnautfounded in 2019, had placed money on the Anchor protocol to grow his UST stablecoins. We are talking about almost 300 million of dollars of investment. Following the crash, the company found itself in great difficulty and finally blocked withdrawals and deposits on August 8. Then, unable to repay her debts, she was placed under judicial management by the Singapore Court on August 30.
The judge appointed a judicial administrator who succeeded the CEO during the proceedings. This should allow, in theory, to restructure debt and to avoid an outright liquidation of assets. And the two people appointed to carry out the turnaround of Hodlnaut happen to be Angela Ee and Aaron Loh who, in addition to their professional activities at EY Corporate Advisorsare part of the Algorand Foundation.
…and involves Algorand in its liquidity problems
And this is how we come back to Algorand, finally implicated by ricochets in the unsuccessful placements of Hodlnaut. The foundation recently reported a hole in 35 million of dollars on its balance sheet following an investment with the Singapore company. In a document made public on September 9, Algorand issued the following statement:
” These were simple term deposits whose withdrawal is impossible following the freezing of the platform. While reassuring observers and investors, the Foundation would like to point out that it was pursuing all legal remedies to maximize asset recovery. Algorand is therefore at the forefront of the trial which should open very soon in order to settle the debts and therefore the future of the Hodlnaut platform. »
The justice finds itself increasingly involved in cases involving crypto companies. the lack of effective regulation environment causes users, leaders and even institutions to turn to it and demand accountability. From Singapore to New York, judges have a lot to do to try to bring some order to this digital Far West.