Hodlnaut, a cryptocurrency lender announced 8 days ago that withdrawals would be suspended due to volatility in the market. This week the company says it is seeking judicial management that aims to “provide the best chance of recovery.”
Hodlnaut Updates Customers — Crypto Lender Asks Singapore High Court for Judicial Management
The crypto lender Hodlnaut is looking for help from the courts so the platform can “avoid a forced liquidation” of the company’s assets. Last week on August 8, 2022, the crypto startup paused withdrawals and noted that the firm was “actively working on the recovery plan.” Hodlnaut believes that leveraging court-appointed management is the best move forward and on August 13, 2022, Hodlnaut registered for judicial management with the Singapore High Court.
Singapore law allows companies in financial trouble to recover losses through the assistance of a judicial supervisor. Hodlnaut can also be protected from legal action and claims. “This pause will provide us with the breathing space to focus our efforts on the recovery plan to rehabilitate the company,” Hodlnaut explained on Tuesday. Hodlnaut hopes that Mr. Tam Chee Chong from Kairos Corporate Advisory Pte Ltd will be appointed interim judicial director.
Hodlnaut claims that even though Hodlnaut has registered the company for court-appointed administration, they have not yet processed their applications. The company plans to update the public on August 19, in order to “provide more substantive updates on the judicial management process.” Hodlnaut’s withdrawal pause and financial issues follow companies like Celsius, Voyager Digital, Babel Finance, and Vauld freezing withdrawals as well.
Hodlnaut claims that the process to obtain judicial management from Singapore High Court could take several months. At the very bottom of the blog post, there’s a set of frequently asked questions and one of the questions asks if all of the customers’ funds are gone. Hodlnaut states “No, while Hodlnaut is facing a difficult financial situation at the moment, not all your assets are gone. As it stands, as we have halted all withdrawals, no user will receive priority in withdrawals.” The crypto lender’s blog post concludes:
We are aware of the distress caused by this information and will continue to update our customers as necessary.
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