A Singapore court has placed beleaguered crypto lender Hodlnaut under judicial management, granting it breathing space to be restructured.

The Singapore-based firm said the court had appointed Ee Meng Yen Angela and Aaron Loh Cheng Lee, of EY Corporate Advisors, as the interim judicial managers.

Hodlnaut, a crypto borrowing and lending platform, halted withdrawals, token swaps, and deposits for its users on Aug 8, citing adverse market conditions.

Since then, the platform fired at least 40 employees, or 80% of its staff, in an effort to cut costs.

The lender’s collapse was one of a number of high-profile incidents to have hit the crypto industry in the last few months, along with the demise of Terra, Celsius Network’s financial struggles, and Three Arrows Capital’s loan default.

Hodlnaut was mentioned as a client of Celsius’ institutional division in the bankruptcy court’s records, which was the first inkling that it was facing financial difficulties.

However, Hodlnaut put the blame for its losses on the TerraUSD crash, exceptionally high withdrawal volumes, the general decrease in cryptocurrency prices from their peak in 2021, and issues with certain users who had sizable deposits.

The court had, in a similar move, previously granted three months of creditor protection to crypto platforms Vauld and Zipmex. 

Judicial management is a type of debt restructuring that sees an entity manage the business, property, and assets of a distressed company. Hodlnaut will also be protected from legal proceedings from third parties while the restructuring is underway.

The platform thinks that, given the state of the market, judicial management is the best long-term strategy for its users. 

Hodlnaut had previously said: “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.”

But, until the appointed interim managers implement a recovery strategy, users are denied access to their funds. And building a strategy could take months depending on the approach of the managers. 

Meanwhile, in the interim, the action only buys Hodlnaut time.

The post Singapore Court Grants Hodlnaut Time to Get Its Affairs in Order appeared first on BeInCrypto.

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