The non-profit Algorand Foundation, which supports and monitors development of the Algorand blockchain, declared exposure of $35 million to struggling crypto lender Hodlnaut, CoinDesk wrote.
Over the weekend, Algorand Foundation published a statement on its website saying the funds comprised less than 3% of its total assets and it did not expect the exposure to cause any “operational or liquidity issues.”
Crypto winter hitting blockchain operators
Algorand is among a growing number of blockchain operators affected by the recent crypto market decline.
According to a CoinDesk investigation in July, liquidated crypto fund Three Arrows owes the platforms behind Khyber Network and Moonbeam more than $27 million.
Hodlnaut suspended withdrawals
Singapore-based Hodlnaut is one of a few crypto firms that collapsed under the pressures of the decline. It suspended withdrawals on August 5 and applied to be placed under judicial management five days later.
With judicial management, an entity is appointed to manage the property, business, and assets of a struggling company. Third parties cannot initiate legal proceedings against the company during the process.
Algorand is pursuing legal remedies
Algorand announced it would take legal remedies to increase the likelihood of maximizing assets. The ecosystem invests part of its surplus treasury capital to fund its development.
Most of the investment is comprised of short-term locked deposits that have become unavailable now that Hodlnaut froze withdrawals.