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Hodlnaut Gets Interim Judicial Management and Creditor Protection
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Hodlnaut announced on Tuesday, August 30th, that a Singapore court approved its creditor protection and IJM request on Monday. This news appears to represent a breakthrough for the company that has been suffering under tremendous pressure since the LUNA crash.
Hodlnaut Approved for IJM
According to Tuesday’s announcement, a Singapore Court ruled that the Hodlnaut will be placed under interim judicial management. Ee Meng Yen Angela and Aaron Loh Cheng Lee have been nominated for this role by two creditors on the 26th and approved yesterday.
The role of the IJM will be to attempt to rehabilitate the struggling company. Generally, this is done by reorganizing a struggling company’s debt and property. At this point, Hodlnaut is managing assets worth around $88 million and an outstanding liability of more than $280 million. The company suffered a loss of around $190 million due to the Terra crash.
At the time of writing, Hodlnaut stated it can’t share any additional details. However, the post also stated that further updates will be posted on the company’s website, Twitter, Telegram, and via email.
A Brief History of Hodlnaut’s Woes
Holdnaut announced on August 16th that it filed from creditor protection and interim judicial management a few days earlier. This move was made due to the severity of losses suffered due to Terra’s massive collapse in May, and due to the general difficulties of the ongoing “crypto winter.”
Since its troubles began, the company was forced to lay off much of its staff and Singapore police got involved in the matter. Hodlnaut also took to the time explain its decision to seek court protection in the post made earlier this month:
As we work towards stabilizing our financial situation, the Founders and the Hodlnaut team in Singapore are working closely with our lawyers, and have weighed various available options for our next steps. 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. Therefore as of 13 August 2022, Hodlnaut Pte Ltd filed an application with the Singapore High Court to be placed under judicial management.
As a consequence of Hodlnaut’s troubles and the overall LUNA collapse, Singapore announced reforms in its stablecoin regulations. Among other changes, the country will restrict retail access to crypto services.
This article originally appeared on The Tokenist
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