The fund said it is using “all legal means to maximize asset recovery.”
The Algorand Foundation discovered a $35 million USD Coin (USDC) hole in its balance sheet as a result of exposure to cryptocurrency lending firm Hodlnaut, which has suspended payouts since August 8.
Algorand is an institutional blockchain infrastructure with integrated smart contract functionality. The Algorand Foundation is a non-profit public organization dedicated to developing the Algorand ecosystem.
The announcement was made on the Algorand fund’s website on Friday, and the fund said it was using “all legal means to maximize asset recovery.”
Hodlnaut’s financial situation initially deteriorated when its $300 million investment in TerraUSD (UST) on the anchor protocol collapsed following the depegging of UST and the collapse of the Luna Classic (LUNC) token, resulting in that the crypto lending company suspended payouts and halted all trading activities citing a liquidity crisis.
A few weeks later, a court in Singapore placed the company under interim court administration as part of a bankruptcy protection program.
The Algorand Foundation said most of the investments blocked on the platform consisted of “blocked short-term deposits” but these are currently unavailable due to Holdnaut’s suspension of withdrawals.
However, the Algorand Foundation notes that the $35 million represents less than 3% of the fund’s assets, and they “do not anticipate (new) operational or liquidity problems,” adding that “funds exceeded day-to-day needs.” “. Requirement:”
“We are investing some of our excess proprietary capital to generate revenue for the development of the Algorand ecosystem and these funds have been invested for this purpose.”
Cryptocurrency lender Hodlnaut is now under temporary court administration to resolve liquidity issues.
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Under the jurisdiction of Singapore, legal entities are placed under temporary judicial administration for the purpose of debt restructuring to preserve and protect at-risk assets during litigation.
The Algorand Foundation played a key role, pointing out that on August 29, the Singapore High Court appointed Foundation nominees Angelou Yi along with EY Corporate Advisors’ Aaron Loh as Hodlnaut’s interim judges with the aim of assigning Hodlnaut’s assets pending further litigation preserve begins.
