The official notice issued by Algorand Foundation reads, “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.”
Algorand Foundation revealed it has a $35M USDC exposure to Hodlnaut. However, Algorand's short-term deposits are currently locked in Hodlanut as the lending platform halted all token swaps and withdrawals in August.
The announcement came a few days after Algorand added the Stake Proofs feature to its protocol, enabling a cross-chain community and increasing the blockchain’s transaction speed.
As Hodlnaut prepares for the case conference for the platform’s Judicial Management Application scheduled for September 15, the firm behind the Proof-of-Stake Algorand (ALGO) token announced it had invested a portion of its USDC holdings with Hodlnaut.
“A majority of the investment consisted of locked, short-term deposits that became unavailable following Hodlnaut’s suspension of withdrawals.”
In the official notice, Algorand claims that USDC holdings locked in its Hodlnaut account were surplus funds, accounting for less than 3% of Algorand Foundation’s assets. Moreover, Algorand remains confident that this action would not cause any operational issues.
Additionally, Algorand clarifies that most of its USDC investment consists of short-term deposits that are unfortunately stuck on Hodlnaut's platform after the latter closed its withdrawals and token swap services last month. As of writing this article, Hodlnaut has not revealed when the lending platform will reopen its withdrawals.
Lastly, Algorand Foundation assures its community that the firm is taking legal action to recover its frozen assets.
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