Distressed crypto lender Hodlnaut starts liquidation in Singapore

Hodlnaut, a Singapore-based crypto lending company, will be liquidated by its previously appointed judicial managers, according to a document published by accounting firm EY.

The document, filed by the liquidators and first reported by CoinDesk, says the judicial managers filed a liquidation order against Hodlnaut on November 10. Hodlnaut previously tried to avoid liquidation, but was met with resistance from creditors.

The company had more than $13 million in assets in the now-bankrupt FTX exchange and lost $189.7 million in Anchor Protocol, the failed DeFi platform for the Terra stablecoin UST, which lost its peg last spring.

Rescue attempt

Last August, Hodlnaut informed its 17,000 users that it halted withdrawals from the platform and withdrew its license application from the Monetary Authority of Singapore. The company too applied be placed under judicial management so that it does not have to sell crypto assets in a forced liquidation. Aaron Lee and Angela Ee were appointed as judicial managers.

The company laid off 80% of its staff and informed users of an ongoing investigation by the Singapore Police Force. The investigation began in November, with police saying Hodlnaut “made false statements regarding the company’s exposure to a particular digital token.”

Creditors turned down the restructuring plan in January and said they preferred liquidation. In particular, the Algorand Foundation, one of the creditors, wrote in a filing that the liquidation “will maximize the company’s remaining assets available for distribution,” according to Bloomberg.