Today we are informing the community that the Algorand Foundation has a $35 million USDC exposure to Hodlnaut, a Singapore-based crypto lender that was placed under Interim Judicial Management after suspending withdrawals from its platform on August 8, 2022.
These funds were surplus to day-to-day requirements and represent less than 3% of the Foundation's assets, and we do not anticipate operational or liquidity issues due to this action.
As part of the Foundation's mission, from time to time, we invest a portion of our surplus treasury capital to generate yield for the purpose of Algorand ecosystem development, and these funds were invested for that purpose.
A majority of the investment consisted of locked, short-term deposits that became unavailable following Hodlnaut's suspension of withdrawals.
The Foundation is pursuing all legal remedies to maximize asset recovery and will continue to do so.
On August 29, 2022, the Singapore High Court appointed Algorand's nominees, Ms. Angela Ee and Mr. Aaron Loh of EY Corporate Advisors Pte Ltd, to act as the interim judicial managers of Hodlnaut, with the aim that they identify, preserve, and protect Hodlnaut's assets until further court action begins.
The Algorand Foundation continues to be dedicated to helping fulfill the global promise of the Algorand blockchain by taking responsibility for its sound monetary supply economics, decentralized governance, and healthy and prosperous open-source ecosystem.