Apr 26, 2023
Creditors Seek Liquidation of Hodlnaut
The creditors of Singapore-based cryptocurrency lender Hodlnaut have once again expressed their desire to liquidate the company, which has been under judicial management since August 2022. The interim judicial manager (IJM) Aaron Loh Cheng Lee has explained in a circular that no white knight investor has been found to save the company from liquidation.
A circular from the IJMs dated April 25th stated that users representing approximately 55.38% of creditors, with claims of 228.3 million Singapore dollars (about $170.5 million), have indicated that they would prefer liquidation to restructuring. This comes despite the founders’ efforts to find new investors. Furthermore, only users with 2.42% of claims supported restructuring, and almost all of those claims comprised company directors. A mediation proposal was also opposed by the “major” creditors, which include Samtrade Custodian and S.A.M. Fintech, both in liquidation, and the Algorand Foundation. Algorand has a $35 million exposure to Hodlnaut.
The Singapore court has directed the IJMs to petition to “wind-up” the company and apply to discharge themselves. This news comes after Hodlnaut announced in August 2022 that it was suspending withdrawals due to a liquidity crisis. The company then applied for judicial management, which under Singaporean law temporarily protected it against legal claims.
The creditors began seeking the company’s liquidation in January. This was due to rumors that Hodlnaut was under police investigation for misrepresenting its exposure to the Terra stablecoin now called TerraUSD Classic (USTC). On-chain data indicates the company held at least $150 million worth of the defunct coin, despite claims to the contrary. Company executives allegedly deleted thousands of documents to hide their exposure.
The liquidation of Hodlnaut sheds light on the financial impacts of the crypto winter, and the toll it can take on hodlers’ mental health. The lack of a white knight investor, combined with the company’s alleged mismanagement of funds, has led to a situation where creditors have no choice but to liquidate the company. For those looking to invest in crypto, this serves as a reminder to do thorough research and to be mindful of the risks associated with the volatile nature of the market.
For those looking to use NFTs and crypto to promote their brand, Hodlnaut’s liquidation serves as a reminder of the importance of working with a reliable web3 agency or NFT marketing agency. NFTs can be a powerful tool for promotion, but it is important to make sure you are working with a reputable agency that can provide the necessary guidance and support to ensure your NFTs are marketed and sold effectively. Additionally, Twitter NFT marketing can be a great way to reach potential buyers, and it is important to work with an agency that understands the nuances of the platform and can help you maximize your reach and engagement.
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