Cryptocurrency lending firm Hodlnaut is letting employees leave and has applied for placement under judicial management on the grounds of its financial circumstances, as reported by Cointelegraph.
According to Cointelegraph, Hodlnaut, which provides interest-oriented cryptocurrency investment options in vetted institutions, recently confirmed its bankruptcy. The platform claims to have been in a poor financial position due to losses suffered by its Hong Kong at the time of TerraUSD crash, high amount of withdrawals and a general downward trend across cryptocurrency markets. Holdlnaut applied for judicial management, for which the Singaporean court will appoint a manager to go through their accounts and activities for avoiding liquidations of Hodlnaut’s holdings of Bitcoin (BTC) and Ethereum (ETH).
On the basis of information by Cointelegraph, judicial management will allow Hodlnaut to devise a recovery plan with the aim to rehabilitate the company. Statement from the company noted that it intends to restore its 1:1 asset to debt ratio to enable users withdraw their initial cryptocurrency deposits. Hodlnaut noted on the option to explore allowing users to withdraw initial deposits with interest accrued before closure of their accounts with Hodlnaut, which will be subjected to approval by the soon-to-be-appointed judicial manager.
Moreover, Cointelegraph noted that company, through a statement, mentioned about retrenching 40 employees, accounting for 80% of its group, in order to get down further expenses. Hodlnaut plans to stabilise its liquidity by diminishing burning rates, which will ensure open term interest rates changed to 0% APR. The judicial management’s application will be under process, just a couple of weeks after Hodlnaut stopped withdrawals and deposits. The firm stated that it had no investment exposure to bankrupt lending firm Three Arrows Capital but on-chain analytics suggests that Hodlnaut had exposure to Terra’s algorithmic stablecoin UST. The company confirmed about its ongoing proceedings involvement with the Singapore attorney-general and the Singapore police-force.
(With insights from Cointelegraph)
Also Read: NFT ventures launched for the public