Hodlnaut, a Singapore-based crypto lender, has filed for judicial management, giving it more time to recover from its recent financial difficulties. The troubled crypto lender froze user assets on the platform more than a week ago.
Hodlnaut is a cryptocurrency lender that allows users to deposit and earn interest on cryptocurrencies such as Bitcoin and Ethereum. It is one of many crypto lenders to have been shut down during the recent crypto market downturn.
To begin with, the application, which was officially filed on August 13, will keep the company from having to sell assets to cover any shortfall on its books.
What is the Crypto Lender Hodlnaut?
Hodlnaut is a cryptocurrency lender that allows users to deposit and earn interest on cryptocurrencies such as Bitcoin and Ethereum. It is one of many crypto lenders to have been shut down during the recent crypto market downturn. To begin with, the application, which was officially filed on August 13, will keep the company from having to sell assets to cover any shortfall on its books. The application will also provide other benefits on its arduous road to recovery.
The long road ahead!
The first will see an independent third party replace Hodlnaut’s directors as the company’s manager and overseer.
Chee Chong Tam, a former partner at Deloitte Southeast Asia and current director of Kairos Corporate Advisory, has applied to be appointed as judicial manager. Tam is also Hodlnaut’s choice for interim judicial manager while the firm’s application is reviewed by Singapore courts.
Second, and perhaps more importantly, the filing will put any legal claims against the firm on hold for the time being. “This pause will give us breathing room to focus our efforts on the recovery plan to rehabilitate the company,” Hodlnaut said.
According to the statement, “while Hodlnaut is currently facing a difficult financial situation, not all of your assets are gone.”
The new member of the crypto liquidity crunch
Hodlnaut is one of several crypto lenders, including Celsius, Voyager, and BlockFi, that have run into financial difficulties since the crypto market crash earlier this year.
Celsius’ Chapter 11 filing revealed that the company’s liabilities exceeded its assets by $1.2 billion. Voyager also declared bankruptcy on July 6, just five days after halting user withdrawals.
In the case of BlockFi, the CEO of crypto exchange FTX, Sam Bankman-Fried, offered a $250 million bailout package with plans to acquire the New Jersey-based lender.
