After recently halting withdrawals on its platform, crypto lender Hodlnaut is filing for creditor protection in Singapore. This would prevent any legal claims and procedures from being brought against it by creditors.
As it seeks to solve its liquidity crisis, the troubled Asian crypto lender Hodlnaut, which stopped client withdrawals last week, has applied for protection against creditors in Singapore.
In announcing the information on Tuesday, Hodlnaut stated that the company had submitted an application to the Singapore High Court on August 13 to be put under judicial administration, a procedure that would prevent any legal claims and procedures from being brought against it by creditors.
Hodlnaut’s action is comparable to those taken by Zipmex and Vauld, who both requested Singaporean creditor protection and were given roughly three months to settle their financial problems.
Hodlnaut stated that it is collaborating with attorneys and seeks to prevent being forced to liquidate its assets at the present lower rates. On August 19, the company is anticipated to give its subsequent update.
The Singapore High Court will designate a judicial manager—an impartial officer of the court—to supervise Hodlnaut as part of the court’s judicial management procedure.
But according to Hodlnaut, this procedure might take “up to a few months.” For that purpose, it has been asked to be designated as the interim judicial manager and then the judicial manager by Tam Chee Chong of Kairos Corporate Advisory.
In order to allow customers to deposit and earn interest on their cryptocurrency holdings, Hodlnaut was launched in Singapore in 2019. The company stated that as of December of last year, it had over $500 million in assets under management and 10,000 active users.
The funds of Hodlnaut’s clients are still frozen while it is under judicial management. The company hasn’t set a specific date for when withdrawals would probably start to be accepted.
“We will be exploring available solutions on allowing our users to tap into emergency exit liquidity, but these are currently still subject to discussions and approvals by various stakeholders,” said Hodlnaut.