• The Singapore-based crypto lender Hodlnaut is looking at a possible liquidation as the firm’s creditors have rejected the proposed restructuring plan and seek liquidation of the platform’s assets.
• Hodlnaut’s trouble first surfaced in August 2022 when the firm suspended withdrawals, citing volatile market conditions and a lack of liquidity.
• It was later revealed that the crypto lender downplayed its exposure to the collapsed Terra ecosystem and lost nearly $190 million.
The Singapore-based crypto lender Hodlnaut is facing an uncertain future after the firm’s creditors have rejected its proposed restructuring plan. The group of creditors have instead called for the liquidation of the platform’s assets in order to maximize the remaining value.
The news came after a Jan. 12 hearing rejected an application to remove the interim judicial managers who were appointed to oversee the firm’s operations during the restructuring phase. Algorand Foundation, one of Hodlnaut’s key creditors, issued a statement calling for immediate liquidation and distribution of remaining assets among creditors.
Hodlnaut’s trouble first surfaced in August 2022 when the firm suspended withdrawals, citing volatile market conditions and lack of liquidity. However, an investigation into the embattled crypto lender later revealed that the firm had downplayed its exposure to the Terra ecosystem and lost nearly $190 million in the crash. This was compounded by the discovery that the executives had deleted thousands of documents related to their investments in an attempt to hide their exposure.
The creditors’ decision to liquidate Hodlnaut’s assets could be a major blow to the platform and its users. It is unclear what will happen to the remaining funds and assets, and whether or not any of them will be returned to users. The creditors also have to figure out how to divide the remaining assets among themselves, as there is no guarantee that everyone will get their money back.
At this point, there is no clear way forward for Hodlnaut. The creditors have expressed their dissatisfaction with the restructuring plan and have called for liquidation, but there is still a chance that the platform could be salvaged. Only time will tell what will happen to the embattled crypto lender.