Hodlnaut’s Crypto Lending Venture Faces Liquidation, Court Documents Reveal

"Hodlnaut, Singapore-based Cryptocurrency Lender, Faces Liquidation as Winding-Up Order Filed with High Court"

Singapore-based cryptocurrency lender Hodlnaut is set to be liquidated, as confirmed by the company’s former interim judicial managers, Aaron Lee and Angela Ee. The High Court of Singapore received a winding-up order on November 10. The liquidators will provide regular updates to the exchange’s more than 17,000 creditors. Hodlnaut sought creditor protection in August after incurring losses of approximately $189 million due to the collapse of the Terra ecosystem in May 2022. Additionally, the lender had around $13.3 million worth of crypto locked on FTX, which froze withdrawals and subsequently filed for bankruptcy in November last year. Holdnaut’s creditors rejected a restructuring plan earlier this year and opted for liquidation, believing it to be more beneficial to their interests. Aaron Lee and Angela Ee have been appointed as liquidators of Hodlnaut, which will be wound up under the Insolvency, Restructuring, and Dissolution Act of 2018. The winding-up application was filed in May and approved on Friday.

The Singapore-based cryptocurrency lender Hodlnaut is facing liquidation, according to its former interim judicial managers, Aaron Lee and Angela Ee. On November 10, a winding-up order was filed with the High Court of Singapore, signaling the company’s imminent liquidation. The liquidators will keep the exchange’s more than 17,000 creditors informed of any developments. Hodlnaut sought creditor protection in August after suffering losses of approximately $189 million due to the collapse of the Terra ecosystem in May 2022. In addition, the lender had around $13.3 million worth of crypto locked on FTX, which halted withdrawals and eventually filed for bankruptcy in November of the previous year. Earlier this year, Hodlnaut’s creditors rejected a proposed restructuring plan, instead favoring liquidation as they believed it would better serve their interests. Aaron Lee and Angela Ee have now been appointed as liquidators of Hodlnaut, and the winding-up process will be carried out in accordance with the Insolvency, Restructuring, and Dissolution Act of 2018. The winding-up application was filed in May and received approval last Friday.

The decision to liquidate Hodlnaut comes after a series of significant setbacks for the cryptocurrency lender. The collapse of the Terra ecosystem, in which Hodlnaut had significant exposure, resulted in substantial losses. Furthermore, the lender had a substantial amount of cryptocurrency, valued at $13.3 million, locked on the FTX exchange. FTX froze withdrawals and subsequently filed for bankruptcy, exacerbating Hodlnaut’s financial woes. These factors ultimately led to the company seeking creditor protection and the subsequent rejection of a restructuring plan by its creditors.

The appointment of Aaron Lee and Angela Ee as liquidators marks a new phase for Hodlnaut. As liquidators, their role will be to oversee the winding-up process and ensure that the interests of the creditors are protected. This process will be conducted in accordance with the Insolvency, Restructuring, and Dissolution Act of 2018, which provides a legal framework for the liquidation of companies in Singapore. The winding-up application, which was filed in May, has now been approved, paving the way for the liquidation to proceed.

Hodlnaut’s creditors have expressed their preference for liquidation over a restructuring plan. They believe that liquidation will provide a more favorable outcome for their interests. By liquidating the company, the creditors hope to maximize their recovery of funds and assets. This decision reflects the creditors’ assessment of the company’s financial situation and their belief that liquidation offers the best chance of recouping their losses.

The liquidation process will involve the sale of Hodlnaut’s assets, including any remaining cryptocurrency holdings. The proceeds from these sales will be distributed among the creditors in accordance with the established priority of claims. The liquidators will be responsible for managing the sale of assets and ensuring that the proceeds are distributed fairly and transparently.

As the liquidation of Hodlnaut progresses, the liquidators will provide regular updates to the creditors. These updates will include information on the status of the winding-up process, the sale of assets, and the distribution of funds. The liquidators will also be available to address any queries or concerns raised by the creditors.

The winding-up of Hodlnaut under the Insolvency, Restructuring, and Dissolution Act of 2018 highlights the challenges faced by the cryptocurrency lending industry. The collapse of the Terra ecosystem and the subsequent freezing of withdrawals on FTX serve as reminders of the risks associated with these platforms. The liquidation of Hodlnaut will undoubtedly have broader implications for the cryptocurrency lending sector, prompting stakeholders to reassess their risk management strategies and regulatory frameworks.

In conclusion, the liquidation of Hodlnaut marks the end of a tumultuous chapter for the Singapore-based cryptocurrency lender. The decision to wind up the company reflects the creditors’ preference for liquidation over a restructuring plan. Aaron Lee and Angela Ee have been appointed as liquidators and will oversee the winding-up process. As this process unfolds, the liquidators will keep the creditors informed and ensure that their interests are protected. The liquidation of Hodlnaut serves as a cautionary tale for the cryptocurrency lending industry, highlighting the need for robust risk management practices and regulatory oversight.

Martin Reid

Martin Reid

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