A few days ago, crypto lender Hodlnaut halted withdrawals and subsequently announced it will be going under judicial management in Singapore to prevent liquidation; it has now taken further steps to stabilize liquidity and also laid off 40 members of its staff.
TerraUSD crash is the reason for our current situation – Hodlnaut
Hodlnaut in its most recent statement confirmed that its current woes stem from losses incurred by its Hong Kong subsidiary during the TerraUST crash. The company is seemingly doing all it can to not have to liquidate its assets, which includes BTC and ETH, at ‘today’s depressed price’
It has also said that the Singapore Attorney-General / Singapore Police Force are already involved but did not give details, Hodlnaut however assured users that all it’s doing is in their best interest. Furthermore, the firm has laid off 80 percent of its staff in order to cut back on expenditure.
For the interim judicial management— A Singaporean court system where an official is appointed to oversee business in troubled firms for a given period of time, the company relayed that the process has begun and its lawyers attended the first case conference on 18 August.
What happens if Hodlnaut gets liquidated?
The company in the post wrote that the interim judicial management process is what it believes to be best because other than that, Hodlnaut will most likely get liquidated, and this will not be good for both the users and the company considering current market prices.
In the event of a liquidation, all assets of the company are sold first, and then distributed to our users equally in proportion to their holdings. What this would mean is that all users (whether you have deposited BTC, ETH or stablecoins) would likely only get back a fraction of what was initially deposited, The company wrote.
It also assured users that once an interim manager is appointed, he will take up a managerial position in the company and make decisions in the best interest of the users.