Crypto Lender Hodlnaut Seeks Judicial Management to Avoid Forced Liquidation

Singaporean law provides temporary protection from lawsuits and legal claims, which the company says would provide respite to focus on its recovery plan.< /p> New

Singapore-based crypto lending platform Hodlnaut is seeking forensic management to manage its current liquidity crisis and avoid forced liquidation of assets in the current bear market.

The crypto lender informed its users in an announcement on Tuesday that it had applied to the High Court of Singapore to be placed under judicial management. The company said:

"We aim to avoid a forced liquidation of our assets as this is a sub-optimal solution that will force us to sell our users' cryptocurrencies such as BTC, ETH and WBTC at these prices of currently depressed assets. Instead, we believe that legal support would offer the best chance of recovery."

Judicial management is a law in Singapore that allows companies in financial difficulty to recover. Under this law, the court appoints an officer called the judicial director of the company in difficulty who temporarily takes over from the director of the company. The appointment of a receiver can take up to a few months. Until the confirmation of the court, the company can request the appointment of an interim judicial administrator to act on an interim basis in the same capacity.

Hodlnaut recommended Tam Chee Chong, director of the financial advisory firm Kairos Corporate Advisory, as acting director and then judicial director. The crypto lender said Chong has nearly four decades of corporate finance advisory experience and served as a legal director at various companies that have undergone restructuring. The ad read:

"With his experience and track record, we believe he will be able to execute our turnaround plan and effectively restructure the business."

The application has not yet been heard in court and the firm has given August 19 as the next date for further updates on its application for judicial management.

If approved, the law will also temporarily shield Hodlnaut from claims and legal proceedings that the company says would provide "respite...