Hodlnaut is expected to provide its next update on August 19 and hopes that its latest action will give it some time to devise a recovery plan to avoid liquidating customer assets.
Crypto lender Hodlnaut has announced that it has filed for protection against creditors in Singapore in a bid to solve its liquidity issues. According to the announcement, Hodlnaut filed the application with the Singapore High Court on August 13 to be placed under judicial management, just days after the company halted withdrawals from its platform.
The latest application filed by the company will temporarily protect it from any legal claims and proceedings against it by creditors.
“We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies such as BTC, ETH, and WBTC at these current depressed asset prices,” the announcement read.
“This pause will provide us with the breathing space to focus our efforts on the recovery plan to rehabilitate the company,” the statement added.
Hodlnaut also revealed that it is currently working with attorneys to avoid being forced to liquidate its assets at its present lower price. The Singapore High Court will also appoint a judicial manager who will be an independent officer of the court to manage the firm as part of its judicial management process.
The firm has, however, applied to appoint a former partner at Deloitte Southeast Asia and the current director of Kairos Corporate Advisory, Chee Chong Tam, to take on the role of judicial manager.
Chee Chong Tam is also the company’s option for the interim judicial manager while the Singapore courts review the firm’s application.
Hodlnaut is expected to provide its next update on August 19 and hopes that its latest action will give it some time to devise a recovery plan to avoid liquidating customer assets.
The Singapore-based firm is the latest name on an already long list of crypto companies that have had financial issues this year due to the recent market downturn. Celsius, Voyager, and BlockFi are all firms stung by the recent market crash.
Hodlnaut was founded in 2019 in Singapore to allow clients to deposit their crypto holdings and earn interest. The company revealed that it had over $500 million in assets under management as of December 2021.
The firm also reassured its customers via the statement that their assets are not gone and that they are just facing a difficult financial situation at the moment.
“We will be exploring available solutions on allowing our users to tap into emergency exit liquidity, but these are currently still subject to discussions and approvals by various stakeholders,” the firm stated.
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