See More

Hodlnaut Files for Judicial Management a Week After Halting Withdrawals

2 mins
Updated by Geraint Price
Join our Trading Community on Telegram

In Brief

  • Hodlnaut is seeking protection from creditors a week after it halted withdrawals.
  • The platform has filed an application to be placed under judicial management.
  • Previously, the court had granted creditor protection to Vauld and Zipmex.
  • promo

Troubled crypto lender Hodlnaut is seeking protection from creditors a week after it halted withdrawals amid a liquidity crisis.

In its first update, the crypto platform stated that it has filed an application with the Singapore High Court to be placed under judicial management.

“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,” it said.

Hodlnaut hopes for breathing space

According to Singaporean law, judicial management is a method for businesses in financial difficulties to recover. Under this, a judicial manager is selected to oversee the affairs, operations, and assets of a firm in financial crisis as part of the judicial management technique of debt restructuring.

The business has the chance to rebuild while being temporarily protected from legal action by outside parties. The company has requested that Tam Chee Chong of Kairos Corporate Advisory be appointed as Interim Judicial Manager and, later, Judicial Manager.

“This pause will provide us with the breathing space to focus our efforts on the recovery plan to rehabilitate the company,” said the platform. Meanwhile, as the application awaits a court hearing, the platform has vowed to provide the next update at the end of the week.

Hodlnaut has yet to provide a timeline for users to withdraw funds. But, typically, obtaining a judicial management order from the Singapore Court can take several months.

Zipmex, Vauld sought similar protection

Recently, the Singapore court granted creditor protection to Zipmex for three months, giving the exchange time to consult with regulators and develop a strategy to address the $53 million exposure from crypto lenders Babel Finance and Celsius.

In a similar move, the court had previously granted three months of creditor protection to Vauld as liquidity crises in the industry land on the doorstep of Singapore’s courts.

Last week, Hodlnaut suspended withdrawals, token swaps, and deposits for its users on the back of recent “market conditions.”

At the same time it was being reported that Hodlnaut notified the Monetary Authority of Singapore (MAS) of its intention to withdraw its license application related to regulated digital payment tokens (DPT).

Meanwhile, once the South Asian center for crypto businesses, Singapore is lately dealing with bankruptcy blowups.

Last month, MAS chairman Tharman Shanmugaratnam stated in a written response to a parliamentary question that the Singapore Monetary Authority “has been carefully considering the introduction of additional consumer protection safeguards.”

Top crypto platforms in the US | March 2024

Trusted

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

shraddha_sharma.jpg
Shraddha Sharma
Shraddha is an India-based journalist who worked in business and financial news before diving into the crypto space. As an investment enthusiast, she has also has a keen interest in understanding crypto from a personal finance standpoint.
READ FULL BIO
Sponsored
Sponsored