Blaming market conditions and lack of liquidity, Singapore-based crypto lending platform Hodlnaut has become the latest firm to suspend withdrawals and deposits.

The crypto lending firm made an official announcement on Monday, claiming that market conditions have forced it to suspend its services and that it is actively working on recovery plans. 

Hodlnaut also stated that it has withdrawn its regulatory license application in Singapore and as a result, would no longer be able to offer any token swaps features. The official announcement read:

“We are actively working on the recovery plan that we hope to provide updates and details on as soon as permissible. We are consulting with Damodara Ong LLC on the feasibility and timelines of our intended execution plan and are strategizing our recovery plan with our users’ best interests in mind.”

The crypto lending platform said it would suspend all of its social media accounts except for the official Twitter and Telegram. Apart from the social media suspensions, founder Juntao Zhu has gone private on Twitter.

The crypto lending crisis began with the Terra (LUNA) — now renamed Terra Classic (LUNC) —ecosystem collapse followed by the bankruptcy of leading crypto hedge fund Three Arrow Capital (3AC). The back-to-back market turmoil created a domino effect for crypto lenders with exposure to the hedge fund as well as the Terra ecosystem. Voyager Digital, Celsius and Blockchain.com were some major crypto lenders that suspended their services.

Hodlnaut managed to avoid any 3AC exposure, but some reports have claimed that the firm was not transparent regarding its investments in Terra's now defunct algorithmic stablecoin. A report published by Twitter handle Fatman in June pointed toward the large exposure of Hodlnaut during the stablecoin’s depeg and how they misrepresented their position:

Zhu has claimed that the firm neither bought any UST nor incurred any losses on its UST yield services, but failed to offer any documentation as proof.

The apparent downfall of another crypto lending platform invoked furious reactions from the crypto community with many advocating for investors to store their crypto off-exchange. Others pointed toward the domino effect that the UST collapse created in May with effects being seen even now.