Hodlenaut, a leading firm in the crypto industry, stopped withdrawals, deposits, and token swaps on 8th August, referring to the present conditions that prevailed across the market. The suffering platform filed to have protection from creditors in Singapore to stay away from its assets’ compelled liquidation. Reportedly, nearly $187M worth of TerraUSD was held by Hodlnaut however the respective figure declined to zero in May and the company’s troubles began after which it went through considerable losses.
Hodlnaut Hopes Recovery by Laying off 80% of Employees
Nonetheless, the venue assured that proceedings are pending between Singapore police and the firm, dealing with the attorney general of the state. A blog post was published by the cryptocurrency venue on Friday in which it disclosed that 80% of the workforce operating under it has been eliminated. While updating the consumers on the same day, Hodlnaut noted on its official Twitter account that the 1st Case Conference for its IJM application has been attended by its lawyers on 18th August.
Judicial management is known as a mechanism within the law of Singapore to facilitate the firms undergoing financial distress and help them restore their business. An autonomous officer is appointed by the Court to substitute the directors of the troubled platform in the respective process. The respective officer’s task is to manage the venue as the judicial manager.
Hodlnaut Files for Interim Judicial Management
In Hodlnaut’s case, the appointed official will review the entirety of the operations and accounts of the company and will have the ultimate power to take decisions regarding all its factors. The person will also assist the firm in providing a recovery procedure to the creditors thereof. Apart from that, the application for judicial management comes along a moratorium (also known as a momentary pause) confronting the legal proceedings and claims raised against Hodlnaut.
The staff decrease was done to minimize the expenditure of the company as well as maintain its existence within the market. A significant part would be played by the employees’ remaining 20% in the recovery procedure of the platform, as noted in the blog. It added that the founders of the firm are presently in Singaporean jurisdiction and they will be present in the entirety of the court proceedings.
As asserted by the founders, they are now making efforts regarding their recovery strategy and that the venue will witness stability. The company reportedly claimed that Hodlnaut did not provide assets even to Celsius, though it has an account shared with Celsius. No specific information regarding the court proceedings was given by the platform as it mentioned that it would be in the consumers’ best interest.
The new statement of Hodlnaut specified that the current financial condition of the firm is a consequence of many factors. These take into account the losses of the Hong Kong-based subsidiary of the company during the collapse of TerraUSD with huge withdrawals in unusual amounts. The other elements incude a general dip from the platform’s highs of the previous year, as well as the matters with a few clients by whom great crypto deposits have been made.
