Algorand Foundation, the organization standing behind the development of the Algorand blockchain protocol revealed having a $35 M USDC exposure to the cryptocurrency lending and borrowing platform Hodlnaut. In early August, Hodlnaut suspended withdrawals.
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In a publication, Algorand informed that the funds were surplus to day-to-day demands. They represent below 3% of the Foundation's assets, and the team doesn't predict operational or liquidity assets due to the action. According to the announcement, Algorand is seeking legal remedies to maximize asset recovery.
Hodlnaut started having financial difficulties related to the market fall, and the collapse of Terra Luna. The platform invested $300 M in the TerraUSD (UST) on the Anchor protocol. After the stablecoin lost its peg to dollar, Hodlnaut had to pause withdrawals and halt all trading activity, citing a liquidity crisis.
A few weeks later, the crypto lender was placed under Interim Judicial Management of Singapore. The order is a form of debt restructuring for managing the business, property, and assets of a troubled company. Hodlnaut, will also be protected from legal actions from third parties.