Crypto lender Hodlnaut files for “Breathing Space” creditor protection

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Over a week ago, struggling crypto lender Hodlnaut froze user assets on the platform. Now the Singapore-based company has applied for judicial management.

Hodlnaut is a crypto lender that allows users to deposit cryptocurrencies like Bitcoin and Ethereum and earn interest. He is one of many crypto lenders being hit hard in the latest crypto market downturn.

First and foremost, the application, which was officially filed on August 13, will save the company from having to sell its assets to make up any shortfall on its books.

“We aim to avoid a forced liquidation of our assets as this is a sub-optimal solution that will force us to sell our users’ cryptocurrencies such as BTC, ETH and WBTC at these currently depressed asset prices. “, announces today Lily.

The app will also grant other benefits on its winding road to recovery.

The first will see an independent third party replace Hodlnaut’s directors to run the company and oversee business.

The company requested the appointment Chee Chong Tam, a former partner at Deloitte Southeast Asia and current director of Kairos Corporate Advisory, to assume the role of legal manager. Tam is also Hodlnaut’s choice for acting judicial director as Singapore courts consider the firm’s candidacy.

Second, perhaps more importantly, the filing will temporarily pause any legal action against the company.

“This break will give us the respite to focus our efforts on the recovery plan to clean up the business,” the statement from Hodlnaut continued.

As for affected users, the statement adds, “While Hodlnaut is currently facing a difficult financial situation, not all of your assets are gone.”

Hodlnaut joins the crypto liquidity crisis

Hodlnaut is one of several crypto lenders, including Celsius, Voyager, and BlockFi, that ran into financial difficulties after this year’s crypto market crash.

Celsius’ Chapter 11 filing revealed that the company’s liabilities outweighed its assets by a $1.2 billion. On July 6, Voyager also filed for bankruptcy. after a break user withdrawals just five days before.

As for BlockFi, Sam Bankman-Fried, the CEO of crypto exchange FTX, provided a $250 million bailout with plans to acquire the New Jersey-based lender.

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