Singapore-based crypto lender Hodlnaut suspends withdrawals

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Rep­re­sen­ta­tions of the Rip­ple, Bit­coin, Etherum and Lite­coin vir­tu­al cur­ren­cies are seen on a PC moth­er­board in this illus­tra­tion pic­ture, Feb­ru­ary 14, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

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HONG KONG, Aug 8 (Reuters) — Hodl­naut, a Sin­ga­pore-based cryp­to cur­ren­cy lender and bor­row­er, has sus­pend­ed with­drawals, swaps and deposits, the com­pa­ny said on Mon­day, the lat­est sign of stress in the cryp­tocur­ren­cy industry.

The cryp­to lender also said it would with­draw its appli­ca­tion for a licence from the Mon­e­tary Author­i­ty of Sin­ga­pore (MAS) to pro­vide dig­i­tal token pay­ment ser­vices, for which it received in prin­ci­ple approval in March.

An MAS spokesper­son said it had rescind­ed the approval fol­low­ing the request.

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Hodl­naut said the move was “due to recent mar­ket con­di­tions” and was “to focus on sta­bil­is­ing our liq­uid­i­ty and pre­serv­ing assets”.

The com­pa­ny is the lat­est in a string of cryp­to play­ers glob­al­ly to run into dif­fi­cul­ties fol­low­ing a sharp sell off in mar­kets that start­ed in May with the col­lapse of two paired tokens, Luna and Ter­raUSD. read more 

Oth­er high pro­file fail­ures include U.S. cryp­to lender Cel­sius, and Sin­ga­pore-based fund Three Arrows Cap­i­tal, both of which filed for bank­rupt­cy last month. read more 

Hodl­naut was named as one of Cel­sius’ insti­tu­tion­al clients, accord­ing to court fil­ings.

Sin­ga­pore, a major cen­tre for cryp­to and blockchain in Asia, has seen sev­er­al cryp­to com­pa­nies run into dif­fi­cul­ties in recent months. read more 

Vauld, a Sin­ga­pore-based cryp­to lend­ing and trad­ing plat­form, sus­pend­ed with­drawals in ear­ly July, and lat­er that month, Zip­mex, a South­east Asia-focused cryp­to exchange, sus­pend­ed with­drawals, though has since resumed them for some prod­ucts. read more 

“Dig­i­tal pay­ment token ser­vice providers licensed by MAS under the (Pay­ment Ser­vices) Act are reg­u­lat­ed for mon­ey laun­der­ing and ter­ror­ism financ­ing risks as well as tech­nol­o­gy risks. They are not sub­ject to risk-based cap­i­tal or liq­uid­i­ty require­ments, nor are they required to safe­guard cus­tomer monies or dig­i­tal tokens from insol­ven­cy risk,” said an MAS spokesperson.

They said this was a rea­son why “MAS has been con­tin­u­al­ly remind­ing the gen­er­al pub­lic that deal­ing in cryp­tocur­ren­cy is high­ly haz­ardous,” and added spillover to Sin­ga­pore’s domes­tic finan­cial sys­tem from the recent tur­moil in the cryp­tocur­ren­cy mar­ket has been “very limited”

Hodl­naut did not respond to a request for comment.

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Report­ing by Alun John in Hong Kong, Chen Lin in Sin­ga­pore and Eliz­a­beth How­croft in Lon­don; Edit­ing by Toby Chopra and Louise Heavens

Our Stan­dards: The Thom­son Reuters Trust Principles.

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