A suggested restructuring plan was rejected by significant creditors of the troubled crypto lender Hodlnaut. They instead favor liquidating the business as per a report by Bloomberg.
In a filing made on January 11, Hodlnaut’s court-appointed interim judicial managers claimed that winding up the firm would best serve their interests.
Algorand Foundation, one of the creditors, stated in the court filing that such action should be conducted as quickly as possible. This will help them get the maximum of the company’s remaining assets which will be available for distribution.
How did Hodlnaut reach near liquidation?
With operations both in Singapore and Hong Kong, Hodlnaut stopped withdrawals in August and was given protection from creditors. Although the company tried to dismiss the gravity of the situation, it actually lost close to 190 million USD due to crypto fugitive Do Kwon‘s collapsed Terra sisters’ digital-token ecosystem.
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Several cryptocurrency lenders went down during the global digital asset crash of last year. The year was probably the worst year for the cryosphere as there were many bankruptcies filed, the latest being the collapse of FTX. The dust of all the implosions shook the entire market. The price of tokens kept falling and investors withdrew their funds.
Singapore cops launch probe
In November 2022 Singapore’s police force announced that it was looking into possible fraud and dishonesty by Hodlnaut and its directors.
A clause in the restructuring plan, that would have allowed the directors who oversaw Hodlnaut’s misstep to continue running the company, was opposed by the creditors’ group. Additionally, there was a plea to remove the interim judicial managers, which was again rejected by the court this Friday.
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