Algorand Foundation, the organization governing the development of popular proof of stake blockchain Algorand, has revealed that its balance sheet had a $35 million exposure to Hodlnaut, the now troubled crypto lending firm based in Singapore.

In a Twitter thread last week, the Algorand Foundation confirmed that it had exposure to Hodlnaut after the latter suspended withdrawals from its platform on Aug. 8, 2022, due to liquidity issues following which the crypto lending firm was put under Interim Judicial Management.

"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," the Algorand Foundation said in a blog post.

The $35 million exposure to Hodlnaut was invested for the purpose of yield generation, the Algorand Foundation confirmed.

It said that it invests a portion of the surplus treasury capital to generate yield for the purpose of Algorand ecosystem development from time to time.

"A majority of the investment consisted of locked, short-term deposits that became unavailable following Hodlnaut's suspension of withdrawals," the Algorand Foundation said, adding that it is pursuing all legal remedies to "maximize asset recovery."

The organization also noted that on Aug. 29, the Singapore High Court appointed the Foundation's nominees, Angela Ee & Aaron Loh of EY Corporate Advisors, as the interim judicial managers of Hodlnaut with the goal of protecting the latter's assets, which also include $35 million USDC that the Foundation had invested.

As per a previous report, the proof of stake blockchain Algorand debuted a new upgrade that aims to boost the chain's transactions per second (TPS) and improve cross-chain communication. The upgrade would increase the overall performance of the blockchain by five times.

"Interoperability between blockchains is the future, and Algorand State Proofs are a critical security feature for communication between networks. We are extremely proud of this innovation and believe it will push the entire blockchain landscape forward," said Algorand founder Silvio Micali.

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