A week after suspending its services, crypto-lending platform Hodlnaut filed an application for an injunction with the Singapore High Court. Under judicial management, the crypto lender in financial difficulties will be able to “rehabilitate their business”.
As such, an independent Court official will be appointed in place of Hodlnaut’s directors to oversee the company. This process is also expected to offer some respite, as it provides a moratorium (or a temporary pause) against claims and legal proceedings against Hodlnaut.
Avoid liquidation of client assets
The main objective, as the crypto lender pointed out in his recent update, is to avoid a forced liquidation of his assets. Calling it a “suboptimal solution,” Hodlnaut explained that a forced liquidation will require the removal of users’ crypto assets, such as BTC, ETH, and WBTC, at current depressed prices. The platform, on the other hand, believes that going to court would provide the best chance of recovery.
Hodlnaut has applied for Tam Chee Chong of Kairos Corporate Advisory Pte Ltd to be appointed Acting Court Manager and subsequently Court Manager. According to the announcement, these requests were filed but not heard in court.
“In order to ensure that Hodlnaut is able to prepare and execute its recovery plan, especially given the robust and volatile nature of the crypto industry, we have requested that our proposed Receiver (Mr. Tam Chee Chong) be appointed as Acting Receiver. Manager to put himself in the shoes of the directors and keep the company running smoothly.”
While the exact time frame for obtaining a management order from the Singapore Court remains unclear, the lender speculated that it could take a few months. Hodlnaut’s next update will be released on August 19.
Hodlnaut is the latest company to be affected after the market downturn. Popular whistleblower FatMan has pointed that the lending firm may have had millions of dollars of exposure to Terra’s collapse in June. However, it was not until the first week of August that the exact extent of the damage was revealed.
While freezing client wallets and withdrawals, Hodlnaut said he was actively working on the recovery plan. He also announced the disconnection of all his social media accounts except the official Twitter and Telegram channels.
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