Algorand Foundation exposes $35 million exposure to crypto lender Hodlnaut

The Foundation has stated that it is "pursuing all legal remedies to maximize asset recovery".

The Algorand Foundation revealed a $35 million USDC hole in its balance sheet due to its exposure to struggling cryptocurrency lending company Hodlnaut, which has suspended withdrawals since August 8.

Algorand is an institutional-grade blockchain infrastructure with built-in smart contract functionality. The Algorand Foundation is a non-profit community organization focused on developing the Algorand ecosystem.

The announcement was made on the Algorand Foundation's website on September 9, with the Foundation stating that it was "pursuing all legal remedies to maximize asset recovery".

Hodlnaut's financial situation first fell into deep waters when its $300 million investment in TerraUSD (UST) on the peg protocol fell dramatically following the unpegging of the UST and the collapse of the LUNA token, which caused the crypto lending company to suspend withdrawals and halt all trading activity, citing a liquidity crisis.

A few weeks later, the company was placed in interim receivership, a form of creditor protection program, by the Singapore court.

Today we informed the community about our USDC exposure to Hodlnaut after suspending withdrawals from their platform on August 8, 2022.

Full details can be found here: https://t.co/4pLkSiKW7b

The Algorand Foundation said the majority of investments locked on the platform consist of "short-term locked deposits", but are now inaccessible due to Holdnaut suspending withdrawals.

However, the Algorand Foundation notes that the $35 million represents less than 3% of the Foundation's assets and that it "does not anticipate [eventual] operations...