Creditors of Singapore-based cryptocurrency lending and borrowing platform Hodlnaut have rejected a proposed restructuring plan and would prefer to liquidate the company, according to a Friday report from Bloomberg.
See related article: Singapore police say they are investigating crypto lender Hodlnaut on fraud allegations
Fast facts
- According to a Jan. 11 court filing seen by Bloomberg, creditors indicated it is in their best interest to dissolve the firm as soon as possible in order to maximize the return of remaining company assets to investors.
- Hodlnaut, which has operations in Hong Kong and Singapore, halted withdrawals in August after suffering an almost US$190 million loss in crypto fugitive Do Kwon’s collapsed Terra stablecoin ecosystem.
- The firm was soon placed under the management of interim judicial managers appointed by court order to protect the interests of creditors.
- However, the troubled crypto lender took another hit in November with the withdrawal freeze and bankruptcy of Sam Bankman-Fried’s FTX exchange, in which it reportedly held about US$13 million in assets.
- Hodlnaut creditors are said to have objected to a provision in the restructuring plan that would allow directors who presided over the company’s collapse to continue managing the firm.
- Singapore authorities said in November that they were investigating Hodlnaut and its directors for potential cheating and fraud following reports that employees withdrew US$550,000 from the platform in the lead-up to its withdrawal freeze.
- Hodlnaut did not immediately respond to a request for comment from Forkast about the Jan. 11 filing.
See related article: Crypto lender Hodlnaut placed under creditor protection by Singapore court