Hodlnaut suffered a loss of almost US$190 million due to its exposure to LUNA despite downplaying its vulnerability.
According to Bloomberg, an interim judicial managers’ report – the first since Hodlnaut was granted protection from creditors whilst it worked on a recovery plan – shows the sizeable loss.
“It appears that the directors had downplayed the extent of the group’s exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022,” the report said.
When LUNA imploded in May, Hodlnaut’s Hong Kong arm unloaded the stablecoin, losing the US$190 milllion. In a letter dated 21 July 2022, Hodlnaut directors “made an about-turn”, informing Singapore police that digital assets had been converted to TerraUSD, which was lent out on the Anchor Protocol.
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Furthermore, over 1,000 documents from Hodlnaut’s Google workspace were deleted, which could have helped shed light on the business according to the report. Employees have blocked judicial managers from obtaining several “various key books and records” surrounding Hodlnaut’s Hong Kong arm, which owes $82.43 million to Hodlnaut Pte in Singapore.
US$550,000 was withdrawn by employees between July and when Hodlnaut halted withdrawals in August. The report also revealed Hodlnaut’s total estimated assets equates to US$74 million with liabilities of US$267.6 million, a shortfall of US$193.6 million. 75% of Hodlnaut’s assets are in DeFi.