Creditors of UST/LUNA-inflicted crypto lending firm Hodlnaut have requested liquidation in place of a restructuring proposal. These creditors, including the decentralized blockchain firm Algorand Foundation, concluded on picking liquidation after discovering that the current directors would be responsible for running all of the Hodlnaut’s operations during the restructuring process.
The group of creditors decided that it was not good enough for directors who contributed to the downfall of the crypto lending platform to be in charge of its operations. In their best interest, the firm’s operations should be shut down and their assets liquidated. According to the Algorand Foundation, it is better to “maximize the company’s remaining assets available for distribution.”
As it stands, these directors and their company Hodlnaut are under severe scrutiny by the Singapore authorities.
It is believed that they have been involved in cheating and fraud. Based on a report by Singapore’s Commercial Affairs Department, Hodlnaut and its investors are suspected to have made misleading/false statements and the department is digging to ascertain the claim.
Hodlnaut Tilt Closer to Liquidation
The Singapore-based crypto firm halted withdrawals on its platform in August 2022 citing bearish market conditions as a factor. In no distant time, Hodlnaut filed for Judicial Management oversight with the Singapore High Court which was meant to name Mr. Tam Chee Chong of Kairos Corporate Advisory Pte Ltd who has about 37 years of experience in advisory roles as its interim Judicial Manager all in a bid to avoid forced liquidation.
As per a published statement at the time, “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.”
Before the end of the month, Interim Judicial Management was approved by the court however, Ee Meng Yen Angela and Aaron Loh Cheng Lee, through EY Corporate Advisors Pte. Ltd., were chosen as the Interim Judicial Managers instead. With the present request of its creditors, it seems like the government-aided Judicial Management did not do so much to avoid forced liquidation.