Creditors of Singapore Crypto Lender Prefer Liquidation Over Restructuring

• Creditors of the Singaporean crypto lender Hodlnaut have favored liquidation over restructuring.
• An earlier court filing revealed that the firm’s creditors rejected the proposed restructuring plan, preferring to liquidate the crypto lender’s assets instead.
• The court-appointed interim judicial managers released a report stating that Hodlnaut’s directors had downplayed their exposure to Terra/Luna.

Hodlnaut, a Singaporean crypto lender, has recently been met with creditors who prefer liquidation of their assets to restructuring. This comes after an earlier court filing, released by the firm’s court-appointed interim judicial managers on January 11, revealed that the companies creditors had rejected a proposed restructuring plan.

This proposed restructuring plan would have enabled directors in charge during Hodlnaut’s collapse to continue overseeing the company. Major creditor, the Algorand Foundation, stated in the filing that the liquidation process should be expedited “to maximize the company’s remaining assets available for distribution”. The Algorand Foundation, a non-profit organization that supports the Algorand blockchain, revealed in September 2022 that they had USDC worth $35 million trapped in Hodlnaut following the crypto lender’s withdrawal freeze in August 2022.

Shortly after suspending withdrawals, Hodlnaut filed with the Singaporean High Court to come under judicial management where they later laid off 80% of its workforce. The court-appointed interim judicial managers released a report shortly after, stating that the company’s directors had downplayed the extent of the group’s exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022.

With Hodlnaut’s creditors now favoring liquidation over restructuring, the company will be looking to maximize the remaining assets available for distribution in order to pay creditors. It remains to be seen what will happen next to the Singaporean crypto lender, but as of now, liquidation appears to be the preferred option.