The latest indication of strain in the cryptocurrency market is the suspension of withdrawals, swaps, and deposits by Hodlnaut, a Singapore-based bitcoin lender and borrower.
Hodlnaut also declared it will revoke its March in-principle permission for a license from the Monetary Authority of Singapore (MAS) to offer digital token payment services.
According to a MAS spokesperson, the approval was revoked as a result of the request.
Hodlnaut said that the main reason behind this move was “due to recent market conditions” and was “to focus on stabilising our liquidity and preserving assets”.
Hodlnaut is the most recent in a long line of cryptocurrency players to have issues as a result of a strong market sell-off that began in May with the collapse of two paired coins, Luna and TerraUSD.
Other notable failures include Singapore-based fund Three Arrows Capital and U.S. crypto lender Celsius, both of which declared bankruptcy recently.
According to court documents, Hodlnaut was listed as one of Celsius’ institutional clients.
In recent months, a number of cryptocurrency startups have encountered challenges in Singapore, a major hub for blockchain and cryptocurrency in Asia.
Early in July, the Singapore-based cryptocurrency loan and trading platform Vauld stopped allowing withdrawals. Later that month, the Southeast Asia-focused cryptocurrency exchange Zipmex also stopped allowing withdrawals, though it has subsequently allowed them for specific products.
In an interaction with Reuters, a MAS spokesperson said, “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 technical 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.
They noted that the “extremely limited” impact of the current turmoil in the cryptocurrency market on Singapore’s domestic financial system was due to the fact that “MAS has been continuously reminding the general public that dealing in cryptocurrencies is highly hazardous.”
Image Credit: Hodlnaut Website