After Zipmex, Crypto Lender Hodlnaut Files For Creditor Protection
Hodlnaut, a cryptocurrency lender and borrower based out of Singapore has recently filed an application for judicial management. This shall help the platform restructure its business.
A little over a week ago, the crypto platform had suspended its withdrawals, deposits and swaps.
It also has frozen user assets on its platform itself. The crypto lender precisely allows users to deposit cryptocurrencies such as Bitcoin and Ethereum and then earn interest.
Hodlnaut is among one of many crypto lenders that have faced the aftermath of the crypto downturn.
Hodlnaut had recently informed its users that they have applied to the Singapore High Court for a judicial management.
Judicial management is a law in Singapore that lets financially beleaguered companies get a breather in order to restore itself.
The company has mentioned,
We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies such as BTC, ETH and WBTC at these current depressed asset prices. Instead, we believe that undergoing judicial management would provide the best chance of recovery.
How Is The Judicial Management Helping The Crypto Lender
Under the law of Judicial management which is a recognised law in Singapore, the court is responsible in appointing an officer.
This officer is called the judicial manager who for the troubled company will take over the charge from the company’s director momentarily. To appoint a judicial manager, the court may take up to a few months.
In case the court has not confirmed and is still waiting to do so, the firm can apply to appoint an interim judicial manager to act on temporary basis in the same capacity.
The entire process of appointing a judge could take significantly long and up to a “few months”. The crypto lender has said that it shall provide a next update about the firm’s progress on August 19.
Hodlnaut’s application is set to provide other help to its restructuring program. As mentioned above, an independent third party shall be replacing the crypto platform’s directors in order to run the company and oversee matters.
Hodlnaut has now applied to appoint Chee Chong Tam who has been a partner at Deloitte Southeast Asia in the past and also is the present director of Kairos Corporate Advisory as the judicial manager.
Chee Chong Tam had been Hodlnaut’s choice for interim judicial manager while the Singapore court continues its reviewing process.
Once the law gets the approval it would safeguard the platform from legal claims and proceedings for the current time period. This itself would help the firm buy some time and channelize their efforts to restructure and recover in order to bring the company back on track.