Cryptocurrency Lending Platform Hodlnaut Reportedly Ordered to Wind Down Operations and Repay 17,000 Clients

Cryptocurrency lender Hodlnaut has started its liquidation in Singapore.

As widely reported, Hodlnaut is to be liquidated in Singapore following a failed attempt to restructure the firm’s business operations.

The company reportedly lost funds during the Terra/Luna collapse and the demise of FTX in late 2022.

Hodlnaut, a Singapore-headquartered cryptocurrency lending company, will now be liquidated by its previously appointed judicial managers. This, according to an update released by auditing company EY.

The document, shared by liquidators, states that the judicial managers submitted a winding-up order against Hodlnaut on November 10, 2023. The firm had then attempted to avoid liquidation, however, it then was faced with increasing pressure from creditors.

The company reportedly held more than $13 million in total assets in the now-defunct FTX digital currency exchange and also lost nearly $190 million in the Anchor Protocol, which is yet another failed decentralized finance (DeFi) service for the Terra algorithmic stablecoin UST (which had lost its peg due to various issues).

This past August, Hodlnaut had notified 17,000 customers that it had suspended withdrawals and taken back its license application with the Monetary Authority of Singapore (MAS).

The firm had also submitted an application to be placed under judicial management in an attempt to not have to sell off crypto holdings as part of the liquidation process.

Aaron Lee and Angela Ee had reportedly been tasked with serving as the judicial managers.

The firm also laid off most of its workforce and told clients that there would be a probe launched by Singapore law enforcement agencies. The extensive investigation began in November with law enforcement stating that Hodlnaut had intentionally made “false representations” as they related to the firm’s exposure to a particular crypto token.

Creditors had then proceeded to deny the proposed restructuring plan in January of this year. They stated that they recommended/preferred liquidation instead.

Notably, the Algorand Foundation, which happens to be among one of the creditors, said in a filing that liquidation will “maximize” the firm’s existing assets available for “distribution.”

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