Troubled crypto lender Hodlnaut files for creditor protection in Singapore

Embattled Asian crypto lender Hodlnaut, which halted client withdrawals last week, has filed for protection against creditors in Singapore as it works toward resolving its liquidity crisis.

Announcing the news on Tuesday, Hodlnaut said it filed the application on August 13 in the Singapore High Court to be placed under judicial management — a process to prohibit any legal claims and proceedings against it by creditors.

Hodlnaut’s move is similar to Zipmex and Vauld, who both sought creditor protection in Singapore and received around three months’ time to resolve their financial issues.

Hodlnaut said it is working with lawyers and aims to avoid forced liquidation of its assets at current lower prices. The firm is expected to provide its next update on August 19.

As part of Hodlnaut’s judicial management process, the Singapore High Court will appoint a judicial manager — an independent officer of the court to manage the company.

But this process could take “up to a few months,” according to Hodlnaut. To that end, it has applied for Tam Chee Chong of Kairos Corporate Advisory to be appointed as the interim judicial manager and subsequently the judicial manager.

Hodlnaut was started up in 2019 in Singapore to let users deposit their crypto holdings and earn interest. As of December last year, the firm said its assets under management were more than $500 million and that its active users were 10,000.

While Hodlnaut goes through judicial management, its clients’ funds remain stuck. The firm doesn’t have a definite date as to when it will likely open withdrawals.

“We will be exploring available solutions on allowing our users to tap into emergency exit liquidity, but these are currently still subject to discussions and approvals by various stakeholders,” said Hodlnaut.

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