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Crypto lender Hodlnaut seeks judicial management to avoid forced liquidation of its business

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Crypto lender Hodlnaut seeks judicial management to avoid forced liquidation of its business

SINGAPORE — Embattled cryptocurrency lender Hodlnaut filed an application with the High Court on Saturday (August 13) to be placed in receivership, the company said in a statement on Tuesday.

He added that judicial management would offer the best chance of recovery.

“We aim to avoid a forced liquidation of our assets as this is a sub-optimal solution that will require us to sell our users’ cryptocurrencies such as Bitcoin, Ether and Wrapped Bitcoin at these asset prices currently depressed,” Hodlnaut said.

Insolvency management is a mechanism provided for by Singaporean law allowing companies in financial difficulty to turn their business around.

If granted, it will provide a temporary pause on legal claims and proceedings against Hodlnaut.

“This pause will provide us with respite to focus our efforts on the turnaround plan to rehabilitate the business,” the company said, without giving details of what the turnaround plan entails.

Moving comes later a series of bankruptcies in the crypto sphere, including those from hedge fund Three Arrows Capital and lender Celsius Network.

In addition to Hodlnaut, brokerage firm Voyager Digital and stock exchange Zipmex also had filed for bankruptcy protection.

The High Court has since granted Zipmex a three-month extension of its moratorium protecting Zipmex Asia and its main operating subsidiaries from potential lawsuits by creditors.

“While Hodlnaut is currently facing a difficult financial situation, not all of your assets are gone. As it stands, as we have halted all withdrawals, no user will receive priority in withdrawals,” said the crypto lender.

Hodlnaut added that he has requested a judicial director, who will help with the restructuring of the company and the determination of a specific date for the reactivation of the withdrawals.

Hodlnaut has requested that Mr. Tam Chee Chong of Kairos Corporate Advisory be appointed as Acting Chief Legal Officer and subsequently Chief Legal Officer.

Mr. Tam has more than 37 years of experience in business consulting and in the financial field, including as a legal manager in various companies undergoing restructuring.

The time it takes for the High Court to appoint a judicial official can take up to a few months.

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