Hodlnaut cuts 80% of its workforce and applies for the judicial management of Singapore

Struggling cryptocurrency lending platform Hodlnaut is cutting staff before applying for forensic management.

Cryptocurrency lending company Hodlnaut has cut most of its workforce and asked to be placed in receivership due to a difficult financial situation.

Hodlnaut, which offers interest-bearing cryptocurrency investment options in approved institutions, confirmed the dire situation on Friday. The company's poor financial condition has been attributed to the losses suffered by its Hong Kong subsidiary during the infamous TerraUSD (UST) crash, high volumes of withdrawals, and the general downturn in the cryptocurrency markets.

The company has opted to seek receivership, which will see the Singapore court appoint an official to review its accounts and activities as a last resort to avoid the liquidation of Hodlnaut's Bitcoin (BTC) and Ether (ETH) holdings ).

Judicial management will also allow the company to enact a recovery plan and possibly to rehabilitate the company. The company's statement says it plans to restore its asset-to-debt ratio to 1:1 to allow users to withdraw their initial cryptocurrency deposits.

Hodlnaut also said it is investigating allowing users to withdraw initial deposits with accrued interest in full before closing their accounts with Hodlnaut. This is now subject to the approval of the Judicial Officer who will soon be appointed.

The company will take steps to stabilize its liquidity by reducing depletion rates, which will see all forward interest rates drop to 0% APR from August 22. The company also confirmed that it has laid off 40 employees, or 80.% of its team, to further reduce expenses.

The request for judicial management will take place on August 22, just weeks after Hodlnaut suspended withdrawals and deposits on its platform. The company has maintained...