, Hodlnaut is now under creditor protection
Hodlnaut, a crypto lending company based in Singapore, was placed under interim judiciar management by the Singapore court, a type of creditor protection program.
Three weeks ago, Hodlnaut had stopped all trading and withheld withdrawals from its platform due to a liquidity crisis. On Aug. 30, the crypto lending platform informed its users by publishing an official blog post. Ee Meng Yeen Angela, care of EY Corporate Advisors was appointed interim judicial managers. The blog post said:
“The Court delivered judgment on 29 Aug 2022 and it has been confirmed that Hodlnaut is placed under Interim Judicial Management.”
To avoid forced liquidations during the bear market, the crypto lender sought management. According to Singapore law, the creditor protection program allows financial troubled companies to recover. The court appoints a judicial manager to take over from the company director.
Cointelegraph reported that Hodlnaut had cut 80% off its workforce prior to applying for judicial administration. To allow users to withdraw their initial cryptocurrency deposits, the firm plans to use the judicial management period to increase its asset-to debt ratio to 1:3.
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Crypto lender earlier informed users that they were looking into the possibility of allowing users to withdraw initial deposits with interest accrued in full prior to closing their accounts. This is subject to approval by newly appointed judges
Hodlnaut was one of many crypto lending companies that succumbed to the crypto contagion after the collapse of TerraUSD Classic (USTC), an algorithmic stablecoin. Many crypto lending companies that were exposed to USTC suffered due to the implosion.