Algorand Foundation Reveals $35 Million Exposure in Hodlnaut

According to Algorand Foundation, its $35 million exposure represents less than 3% of its total assets and is in excess of its daily needs. Consequently, it is unlikely to be impacted or have liquidity concerns.

As part of its objective, the foundation invests a portion of its excess treasury capital to produce a return for the growth of the Algorand ecosystem, and these funds were invested for that purpose, the foundation stated.

It stated that the majority of assets were short-term locked deposits and that Holdnaut’s ban on withdrawals rendered these investments unreachable.

In the meanwhile, the charity said that it is exploring all legal options to retrieve its cash. A portion of these efforts resulted in the appointment of temporary judicial managers nominated by the Algorand Foundation to “identify, preserve, and safeguard Hodlnaut’s assets until further legal action commences.”

Additionally, Algorand Foundation is linked to the insolvent crypto hedge firm Three Arrows Capital. The charity engaged in a one-time OTC deal with the hedge fund, according to court documents, but 3AC breached lockup restrictions.

Hodlnaut was one of the crypto companies impacted by the Terra Luna meltdown, which resulted in the suspension of withdrawals on August 8.

According to court documents, Hodlnaut had around $317 million in Terra USD (UST) before to the disaster and lost $189.7 million. Currently, the business is under Interim Judicial Management.

Also Read: Bitcoin’s ‘Bottom Might Be Close’ As Daily BTC Addresses Rise, Warns Trading Expert