By Michael B. Cohen
Vice President of Global Operations
MyChargeBack
Hodlnaut is one of many crypto exchanges shaken up by the crypto crash. After a Hodlnaut review, the Singapore-based crypto lender has requested the courts for protection from creditors. In the meantime, Hodlnaut’s interest rates have dipped to 0% and management has laid off 40 employees – 80% of the exchange’s workforce.
After seeking protection from Singapore’s courts, Hodlnaut management declined to release specific information and said they were taking actions that would be “in the best interests of our users.”
Not only is the crypto lender seeking legal sanctuary from its creditors, but there is news of a Hodlnaut review by police, with whom management says it is thoroughly cooperating. Users’ accounts were frozen due to creditor protection and the impending police Hodlnaut review.
Will Hodlnaut Users Get Their Money Back?
The million-dollar question, perhaps literally, is whether Hodlnaut customers get their money back once the legal review and negotiations with creditors have been concluded. For people who need access to funds, this will be a long time to wait, but some worry whether they will even see their funds again after a significant waiting period.
These concerns emphasize the importance of financial regulation —- something many crypto enthusiasts have rejected in favor of the autonomy on the blockchain. Services like the Hodlnaut app, unlike a regular bank account, lack the same oversight and protection.
Hodlnaut is not regulated by the the Monetary Authority of Singapore (MAS), the country’s financial regulator. Financial regulators usually require adherence to certain standards, such as having a minimum market capitalization to protect customers in case of a shortfall or insolvency.
In addition, conventional bank accounts, unlike the Hodlnaut app, are insured in case of a market downturn, hacking, or another unforeseen difficulty.
Since Hodlnaut’s funds are being frozen during the investigation, there is some indication that it may at least get some of its funds back at the conclusion of the investigation. However, it’s unclear whether funds were removed prior to the account freeze or whether insolvency has put a major dent in the amount it can shell out to customers.
Since Hodlnaut is not regulated and has no license from MAS, it seems that user funds are more at risk than they would be if it were fully regulated.
Given that Hodlnaut is only one of a series of crypto platforms such as Celsius to freeze customer accounts amid concerns of insolvency and police investigations, there’s little wonder that regulation of crypto services is a more welcome proposal, even among crypto enthusiasts, than it was before the fall in bitcoin price.
In the meantime, tracking down customer funds is a job that is going to have to be done, if not by Holdnaut itself, then by crypto trace experts and law enforcement. MyChargeBack experts are adept at handling cases like this and use advanced technology and crypto forensics techniques to locate customer funds.
MyChargeBack Will Investigate Your Crypto Case
If you have lost money on the blockchain through unregulated brokers, bitcoin wallet hacking, or fake merchants, talk to the MyChargeBack team. Our crypto investigations will provide evidence to bolster your claim.
MyChargeBack has developed working relationships with law enforcement agencies worldwide, has extensive knowledge and experience with crypto tracking, and can improve your prospects of getting your funds back.
