Singapore Court Set to Decide Fate of Crypto Lender Hodlnaut in August Hearing

Author

Fredrik Vold

Author

Fredrik Vold

Author Profile

Share

Copied

Last updated:

June 26, 2023 06:58 EDT

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more

A court in Singapore is poised to make a crucial decision about the future of crypto lender Hodlnaut during an upcoming hearing scheduled for August 7, a recent filing has revealed.

The decision stakeholders now are waiting for the court to make is on whether Hodlnaut will be dissolved, or if a reorganization plan that allows it to continue operating in some manner can be approved.

The Singapore-based crypto lending platform, which suspended operations in August 2022, has been under interim judicial management (IJM) since its business was halted last year.

The company reported significant losses of $317 million in TerraLabs’ Anchor Protocol, a staking protocol associated with Terra’s algorithmic stablecoin, which collapsed in May of the same year.

The large loss came despite the company at the time telling its customers that it had no exposure to Terra.

In April 2023, the IJM submitted an application to terminate proceedings and dissolve Hodlnaut, citing the unwillingness of major creditors, including Samtrade Custodian and the Algorand Foundation, to engage in further discussions regarding a potential restructuring deal.

Majority of creditors prefer dissolution

According to the court, 55.8% of Hodlnaut’s debtors prefer a dissolution of the company over a restructuring deal.

Hodlnaut faces approximately S$409 million (US$304 million) in claims from creditors.

Additionally, the IJM noted the absence of any potential savior to rescue the troubled firm, after potential deals with interested buyers earlier this year fell through.

Nonetheless, Hodlnaut’s founders, Simon Lee and Zhu Juntao, have made it clear to the court that they will oppose the application to wind up the company.

Prior to the collapse of TerraLabs in May 2022, Hodlnaut was one of the largest crypto lenders in the world, along other now-bankrupt competitors like BlockFi, Celsius Network and Voyager Digital.