The stigma of the recent bear market and the collapse of Terra is still on. Several crypto lenders filed for bankruptcy protection over the past months amid the said events. Just as the cryptocurrency world was coming to terms with the failure of cryptocurrency lenders such as Three Arrows Capital and others, Hodlnaut, a start-up based in Singapore, made an announcement.
Hodlnaut seeks bankruptcy protection
Last week, the crypto lending platform Hodlnaut stopped processing deposits and withdrawals. The Singapore-based start-up played the same “current market conditions” card as its competitors.
However, it is important to remember that Hodlnaut allegedly invested over $187 million in TerraUSD (UST), now known as TerraClassicUSD (USTC). And if the rumors are true, Holdnaut temporarily stopping their services was just a side effect of the Terra ecosystem completely falling apart.
In a recent development, Hodlnaut has revealed that it has applied for creditor protection. The company said that it intended to do all in its power to prevent the forced liquidation of its assets. They called the same thing a “suboptimal solution” because it would require them to sell their users’ cryptos like Bitcoin and Ethereum at the current “depressed” prices.
Hodlnaut on judicial management
However, the company maintains that embracing “judicial management” would provide them with their “best” opportunity for a successful turnaround. On August 13, 2022, Hodlnaut Pte Ltd applied to the Singapore High Court to be put under judicial management.
Judicial management is a kind of corporate rehabilitation under Singaporean law. This procedure involves the replacement of the board of directors by an independent officer of the court. Legal claims and processes are suspended throughout the duration of the judicial management application.
Further explaining the need for the change, the company said, “this halt will allow us to work on the company’s recovery strategy.” The application has been filed and is expected to be approved in “a few months.” Hodlnaut will provide more information on the progress of the judicial management procedure on August 19th.