The majority of Hodlnaut creditors demand liquidation for the troubled crypto lender.
In a recent update on the situation, interim judicial manager (IJM) Aaron Loh Cheng Lee explained that no white knight investor has appeared to save Singapore-based cryptocurrency lender Hodlnaut.
It is worth noting that since August 2022, the company has been under judicial management.
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According to an April 25th circular, about 55.38% of creditors, with claims totaling 228.3 million Singapore dollars (roughly $170.5 million), prefer the company's liquidation to its restructuring.
Despite the founders' attempts to secure new investors, no new funding source has been discovered.
There appears to be no indication of a white knight investor to date, and hence no prospect of any fresh capital injection.
The option of restructuring the company was backed by users with 2.42% of claims, with company directors making up the majority of these claims.
The "major" creditors, including Samtrade Custodian, SAM Fintech, and the Algorand Foundation, rejected a mediation proposal. It is worth emphasizing that Algorand has a $35 million exposure to Hodlnaut.
As per the letter, the Singapore court instructed the IJMs to file a petition to "wind-up" the company and request their discharge.
Hodlnaut halted withdrawals on August 8th, 2022, due to a liquidity crisis and applied for judicial management the following week. This move temporarily shielded the company from legal claims under Singaporean law. At the time, the firm noted:
We are aiming to avoid a forced liquidation of our assets as it […] will require us to sell our users’ cryptocurrencies such as BTC, ETH and WBTC at these current depressed asset prices.
Hodlnaut was under police investigation for misrepresenting its exposure to the now-defunct Terra stablecoin, TerraUSD Classic (USTC). On-chain data suggests that the company held at least $150 million in the coin, despite claiming otherwise.
Hodlnaut's future looks bleak as the majority of its creditors lean towards liquidation rather than restructuring.
