However, documents from the legal proceedings surrounding the now-underwater firm revealed that Hodlnaut had 317 million UST, which it liquidated at a loss when the previously dollar-pegged UST hit $0.85. In the filing, they wrote, "Due to the market's lack of liquidity, the average exit price of UST to USDC was around 42 cents on the dollar, resulting in realized losses to Hodlnaut Trading Ltd of about USD 189.7M. As a result, Hodlnaut's total debt to depositors of USD 500M became backed by realisable assets of around USD 315M as of 13 May 2022 due to the de-pegging event."
Hodlnaut seems to have lied about their Terra exposure
When Terra was collapsing in May, concerned users of the Hodlnaut lending platform asked whether the firm was exposed. CEO JT wrote on Twitter, "Hodlnaut as a firm did not take any losses on UST, users who held/bought UST on our platform did". Their social media manager wrote, "[Holdnaut] had 0 company exposure to [Anchor Protocol]", referring to the Terra-based lending protocol.
- "Hodlnaut Cuts Staff as Terra Exposure Is Revealed", Crypto Briefing
- Tweet by FatMan