A Singapore Court has placed a popular crypto lending firm, Hodlnaut, under Interim Judicial Management (IJM). The development manifested as part of the measures solicited by the firm to revamp its financial challenges.
Hodlnaut will now be legally immune to proceedings from third parties. IJM usually manifests as a legal approach to carrying out debt restructuring. It allows several persons to effectively manage a troubled firm’s businesses, assets, and operations.
The crypto lender’s legal team introduced two firm creditors to the court on Monday’s hearing. The two creditors then submitted their nominations for IJM candidates. Afterward, the Judge announced the appointment of Ee Meng Yen Angela and Aaron Loh Cheng Lee, care of EY Corporate Advisors Pte. Ltd., as Hodlnaut’s interim judicial managers.
Hodlnaut is facing liquidity issues
Hodlnaut recently joined the growing list of crypto lenders ravaged by liquidity issues. A similar crypto lender, Celsius, is also facing the same crisis and has since a few months ago suspended withdrawals, deposits, and trading on its network. Celsius also reduced its workforce to cut costs. As of press time, the protocol has secured the court’s nod to initiate several measures toward repaying its investors.
Like Celsius, Hodlnaut suspended withdrawals, deposits, and token swaps in early August. According to the firm, the decision was necessary to stabilize liquidity. However, despite the suspension, it allows customers to access their dashboard to monitor their balances.
Hodlnaut said the development wouldn’t hinder customers from exporting their transaction history and interest statements. Despite the suspension, it promised to continue paying out interest accrued according to customers’ balances. The firm says the interest will be paid every Monday till further notice.
Shortly after, the crypto lender retracted its license application from the Monetary Authority of Singapore (MAS). With this development, Hodlnaut does not intend to sustain its status as a regulated virtual payment token provider in the country.
In Mid-August, Hodlnaut decided to dismiss over 80% of its employee. According to its announcement, the tough decision was necessitated by the need to cut costs amidst the liquidity crisis ravaging the firm.
Hodlnaut applied to be put under judicial management. With the approval of the request by the court, it is hoped that Hodlnaut will gradually recover from its current financial crisis.
Related
- Hodlnaut dismisses 80 percent of its workforce
- Crypto Lending Firm Hodlnaut Halts Withdrawals Amid Liquidity Issues
- Hodlnaut halts withdrawals and deposits
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