Singaporean Supreme Court has mandated the liquidation of cryptocurrency lender HODLNAUT
The High Court of Singapore has ordered the dissolution of Hodlnaut, bringing an end to the company’s time under judicial control.
A major turning point in the continuing financial troubles of crypto lender Hodlnaut has occurred with the liquidation ruling from Singapore’s High Court. Based on a motion by Hodlnaut’s interim judicial managers (IJMs), the court has decided to move on from the judicial management phase and begin a new era in resolving the company’s financial issues.
Due to the collapse of the Terra ecosystem and the accompanying instability in the crypto market, Hodlnaut, a previously dominant player in the crypto lending industry, suffered significant difficulties. Hodlnaut allegedly had around $150 million invested in Terra’s stablecoin, TerraUSD Classic (USTC), even though he didn’t have any direct exposure to Three Arrows Capital (3AC). The collapse of FTX, another significant player in the cryptocurrency business, further exacerbated the company’s financial difficulties.
Hodlnaut halted deposits and withdrawals on August 8, 2022, citing the state of the market. This choice was made at the same time as it decided to stop pursuing a license from Singapore’s Monetary Authority. Since August 2022, this has led to a freeze on user funds, which has affected about 17,000 debtors. The Algorand Foundation, Samtrade Custodian, and S.A.M. Fintech are just a few of the notable creditors.
Hodlnaut sought and had IJMs appointed by the court to help it through its financial challenges. The bankruptcy protection it received enabled the firm to slash its employment by 80 percent. The company also had to deal with a criminal inquiry because of the delay in declaring its USTC holdings.
Despite this, in April, creditors of Hodlnaut opted to liquidate the company after previously rejecting a suggested restructuring plan in January. The IJMs also passed on an offer from OPNX in August 2023 because to the reduction in value of OPNX’s FLEX token, which had been created by former 3AC founders Su Zhu and Kyle Davies.
The Singaporean court’s liquidation judgment is consistent with the procedures followed by other crypto lenders like Celsius, whose bankruptcy plan was accepted by a U.S. court the very next day before Hodlnaut’s announcement of its own liquidation. Hodlnaut’s attempts to save its business via judicial administration have ended with the High Court’s ruling, which is now under seal. In their prior roles as IJMs, Aaron Loh Cheng Lee and Ee Meng Yen Angela have been elevated to the position of liquidator to supervise this transition.