On August 29, a type of creditor protection called “interim judicial management” was put in place for the Singapore-based lender.
Three weeks after it stopped withdrawals because of “difficult market conditions,” Hodlnaut has been put under interim judicial management (IJM), which is a form of creditor protection.
In judicial management, the business, property, and assets of a troubled company are run by a third party. This is a type of debt restructuring. In this case, the company, Hodlnaut, will also be safe from lawsuits from other people.
On August 29, Hodlnaut’s lawyers and two creditors who both put in nominations for IJM candidates attended a court hearing together. The judge put Ee Meng Yen Angela and Aaron Loh Cheng Lee in charge of Hodlnaut temporarily. They work for EY Corporate Advisors Pte. Ltd.
Five days after it stopped withdrawals, Hodlnaut asked to be put under judicial management on August 13.
The Singaporean lender was one of many crypto companies that failed when the market for cryptocurrencies went down. This year, a rival lender called Celsius Finance filed for bankruptcy, and the hedge fund Three Arrows Capital fell apart because it had investments in the Terra/LUNA ecosystem, which collapsed in May and wiped out $83 billion in market cap.
When asked Hodlnaut for a comment, they didn’t answer right away.