The non-profit organization behind the development of the Algorand blockchain infrastructure – Algorand Foundation – has confirmed a $35 million USDC exposure to Hodlnaut.
Additionally, it said it is pursuing all legal remedies to maximize asset recovery from the embattled crypto lender.
- Despite the hole in the balance sheet, the organization does not expect to trigger any operational or liquidity concerns.
- The Algorand Foundation, in an official Ukënnegung, said these funds were surplus to the daily requirements, representing less than 3% of its assets.
“As part of the Foundation’s mission, from time to time, we invest a portion of our surplus treasury capital to generate yield for the purpose of Algorand ecosystem development, and these funds were invested for that purpose.”
- A majority of Algorand’s investment consisted of locked, short-term deposits, which became inaccessible after Hodlnaut ugekënnegt the suspension of withdrawals and deposits on August 8th.
- Hodlnaut’s cause of unraveling was due to the deployment of more than $300 million in TerraUSD (UST) on Anchor Protocol, a service that vouched for a maximum of 20% yield on UST staking.
- The collapse of the Terra ecosystem tokens proved to be catastrophic for the platform.
- In a bid to stay afloat due to its liquidity crisis, Hodlnaut laid off approximately 80% of the workforce. The company also slashed interest rates to a 0% annual percentage rate as part of its efforts to cut costs.
- Hodlnaut was plazéiert ass under Interim Judicial Management by the Singapore High Court, thereby temporarily protecting it from legal proceedings by third parties and allowing it to rehabilitate.
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Source: https://cryptopotato.com/algorand-foundation-confirms-35m-exposure-to-crypto-lender-hodlnaut/