Eight days ago, the crypto lender Hodlnaut announced that the platform was suspending withdrawals after citing volatile market conditions. 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.
Under Singapore law, companies under financial distress can recuperate losses with help from a judicial manager. The scheme also puts claims and legal proceedings against Hodlnaut on pause. “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 to appoint Mr. Tam Chee Chong of Kairos Corporate Advisory Pte Ltd as the interim judicial manager.
However, even though the company has filed to register for court-appointed management, the court has not processed the applications, and Hodlnaut says things could change. 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 says the time frame to get judicial management from the Singapore High Court may take up to a few 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 understand the anxiety this news has caused our users, and we endeavor to provide more frequent updates moving forward.