Hodlnaut Files For Management Protection With Singapore High Court
Hodlnaut, one of the cryptocurrency lending startups that has halted withdrawals on its platform has filed an application with the Singapore High Court to be placed under judicial management.
Should its application be granted by the court, an independent Judicial Manager will be appointed to oversee the activities of Hodlnaut while it explores functional avenues to solve its liquidity crisis.
The crypto lending firm announced last Monday that it will be halting its withdrawals based on recent market conditions.
While the firm is yet to file for bankruptcy, it said the Judicial Management process will help shield it from aggrieved clients that may want to seek legal redress in court.
The protection the Judicial Management will offer the firm is advantageous as it will help avert the liquidation of its remaining assets at current market rates.
“As we work towards stabilising our financial situation, the Founders and the Hodlnaut team in Singapore are working closely with our lawyers, and have weighed various available options for our next steps. We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies such as BTC, ETH and WBTC at these current depressed asset prices,” the Hodlnaut announcement reads.
Prior to the approval of the application, Hodlnaut said it wants the Singapore High Court to approve Mr. Tam Chee Chong of Kairos Corporate Advisory Pte Ltd as its interim Judicial Manager.
Drawing on the experiences of Tam Chee, Hodlnaut is confident some of the challenges it is facing including temporary liquidation modalities for interested clients will be solved.
Ripple Effect from Terraform Labs Collapse
Most of the currently distressed cryptocurrency platforms were doing well until the collapse of Terraform Labs, the startup behind the UST stablecoin and LUNA coins, back in May this year.
This unprecedented fall affected renowned hedge fund, Three Arrows Capital (3AC) which was unable to meet its debt obligations to many creditors including Voyager Digital.
Besides, Celsius Network, Babel Finance, BlockFi, and Zipmex are amongst the crypto platforms whose operations have been disrupted by the crypto winter that was ushered in by the LUNA crash.
With the majority of these distressed firms in search of different solutions to get back on their feet, Hodlnaut is confident in its approach to file for the Judicial Management, which will in turn grant it a soothing moratorium.
The information provided on DecentReviews does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Do not treat any of the websites content as such. DecentReviews does not recommend that any cryptocurrency or blockchain asset should be bought, sold, or held by you. Conduct your own due diligence and consult your financial advisor before making any investment decisions.