Singapore-based cryptocurrency lender Hodlnaut announced on Tuesday that it has been placed under interim judicial management by the Singapore High Court.
After Hodlnaut suspended customer withdrawals, token swaps, and deposits, citing difficult market conditions, the firm applied for judicial management to offer it temporary protection against legal proceedings and claims to allow it “breathing space” to focus on its recovery plan. Judicial management is a form of debt restructuring that sees an entity manage the business, property, and assets of a distressed company.
Judicial management will also prevent the firm from having to liquidate its current Bitcoin and Ethereum holdings at a time when prices are particularly low. On August 29, Hodlnaut was placed under interim judicial management and the judge appointed Ee Meng Yen Angela and Aaron Loh Cheng Lee as the firm’s interim judicial managers. Hodlnaut said in a statement:
We will not be able to provide further information at this juncture, but hope to provide further updates once our IJMs (Interim Judicial Managers) determine it necessary to do so.
Hodlnaut became the latest in a string of crypto lenders to run into difficulties following sharp market downturns that started in May with the collapse of TerraForm Labs. Following its application for creditor protection, the firm announced that it was subject to a police inquiry, and has had to cut 80% of its workforce. Hodlnaut said that it cut roughly 40 people, “to reduce the company’s expenditure.” Its statement added that its 10 remaining employees are “necessary” for its current operations.
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