Embattled cryptocurrency lending platform, Hodlnaut has revealed that it has fired as many as 80% of its employees which culminates in exactly 40 staff. As its judicial management hearing is slated for Monday the 22nd of August, the lender said the staff cut is necessary for a bid to cut costs of operations.
While the Singapore-based firm said its retained staff are those needed to continue with key operational activities in the short term, it did not give an indication as to whether it will employ more if its restructuring push is backed by the High Court.
Hodlnaut halted withdrawals on its platform earlier this month as it bemoaned the impact of the Terra ecosystem token crash back in May.
The startup said its Hong Kong subsidiary had significant exposure to the collapsed blockchain and its algorithmic stablecoin. It also noted that the ensuing slump in the prices of crypto assets, coupled with massive withdrawals resulted in a significant liquidity strain that pushed it to suspend operations.
Since the halt in activities, Hodlnaut has made some proactive steps to seek solutions and restructure the firm. One of these is the application for Judicial Management, a legal process that will see the court appoint a manager that will oversee the activities of the firm while it explores the options through which it can restructure.
Hodlnaut considers this move a viable one, as it noted that waiting for its assets to be liquidated will not be in the interest of anyone.
“Judicial management provides Hodlnaut with the opportunity to execute its recovery plan and rehabilitate the company,” the firm revealed in its latest update, adding that “the plan is aimed at restoring our asset to debt ratio to at least 1 and eventually allowing users to withdraw the full value of their cryptocurrency deposited with Hodlnaut. If the Interim Judicial Manager, and subsequently the Judicial Manager, is appointed, he will step into the place of Hodlnaut’s management and make decisions on behalf and in the best interest of our users.”
While it is currently awaiting the verdict from the court, the beleaguered startup said it also has pending inquiries with the Singapore Attorney-General / Singapore Police Force. The company said it will not disclose the details of the inquiry but that it is in the best interest of its customers. Hodlnaut joins the likes of Vauld Group and Zipmex which have sought cover from Singapore authorities amidst their restructuring push.
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