Singapore court to decide on Hodlnaut’s fate in August hearing.
A court in Singapore is set to make a crucial decision about the future of cryptocurrency lender Hodlnaut during an upcoming hearing on August 7th, a recent filing has revealed.
The decision that stakeholders are waiting for is whether Hodlnaut will be dissolved or if a reorganization plan that allows it to continue operating in some form can be approved.
The Singapore-based crypto lending platform, which suspended operations in August 2022, has been under interim judicial management (IJM) since its business was halted last year.
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The company reported significant losses of $317 million in TerraLabs’ Anchor Protocol, a staking protocol associated with Terra’s algorithmic stablecoin, which collapsed in May of the same year.
The large loss came despite the company at the time telling its customers that it had no exposure to Terra.
In April 2023, the IJM submitted an application to terminate proceedings and dissolve Hodlnaut, citing the unwillingness of major creditors, including Samtrade Custodian and the Algorand Foundation, to engage in further discussions regarding a potential restructuring deal.
Majority of creditors prefer dissolution
According to the court, 55.8% of Hodlnaut’s debtors prefer the dissolution of the company over a restructuring deal.
Hodlnaut faces approximately S$409 million (US$304 million) in claims from creditors.
Additionally, the IJM noted the absence of any potential savior to rescue the troubled firm, after potential deals with interested buyers earlier this year fell through.
Nonetheless, Hodlnaut’s founders, Simon Lee and Zhu Juntao, have made it clear to the court that they will oppose the application to wind up the company.
Prior to the collapse of TerraLabs in May 2022, Hodlnaut was one of the largest cryptocurrency lenders in the world, along with other now-bankrupt competitors like BlockFi, Celsius Network, and Voyager Digital.