- An application to remove the temporary judicial managers was denied at a hearing.
- In August 2022, Hodlnaut stopped processing withdrawals due to lack of liquidity.
The group of creditors did not approve of a restructuring proposal. That would have kept the present board of directors in place throughout the transition period. Reports from Bloomberg state that an application to remove the temporary judicial managers was denied at a hearing on January 12.
Swift Liquidation Demanded
Creditors have decided that, because restructuring measures are useless. It is in their best interest to dissolve the company and sell off its remaining assets. One of Hodlnaut’s major creditors, Algorand Foundation, has demanded a swift liquidation and distribution of remaining assets to creditors.
In August 2022, Hodlnaut stopped processing withdrawals due to lack of liquidity and unstable market circumstances. While the crypto lender first denied losing roughly $190 million due to the collapse of the Terra ecosystem, this turned out to be untrue. Later, in order to reduce their risk, the executives destroyed thousands of files containing information on their investments.
To prevent being put into liquidation, the cryptocurrency lender applied for judicial administration under Singaporean law. After a long struggle, the company entered a creditor protection programme in August with the intention of using the management term to get its asset-to-debt ratio back to 1:1, therefore allowing customers to withdraw their initial cryptocurrency investments. The government-backed initiative for judicial administration, however, did not prove to be effective.
It was later in the month of November 2022 that the company’s founders were investigated for allegedly concealing their exposure to certain crypto tokens and other forms of dishonesty. Multiple investor concerns lodged between August and November 2022 prompted the probe.
Recommended For You: