- Hodlnaut says it’s focusing on recovery and rehabilitation.
- Hodlnaut has applied for Tam Chee Chong as judicial manager.
- Hodlnaut to provide next update Aug 19.
LAGOS (CoinChapter.com) — Embattled cryptocurrency lender Hodlnaut, which recently halted withdrawals, has applied for creditor protection in Singapore.
In detail, Hodlnaut applied to be placed in judicial management with the Singapore High Court on Aug. 13. The procedure will prevent any legal claims and proceedings against the crypto lender by creditors.
Hodlnaut, in a statement, said the move would enable it to focus on the recovery and rehabilitation of the company. Moreover, the firm added that the move would help it avoid a forced liquidation of assets.
“We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies such as BTC, ETH and WBTC at these current depressed asset prices. Instead, we believe that undergoing judicial management would provide the best chance of recovery.”Hodlnaut said.
The Singapore-based company also stated that not all of its users’ funds are lost and is working with lawyers to resolve its financial situation. Meanwhile, it did not provide a definite date to restart withdrawals. However, it is exploring ways to allow clients to tap into its emergency exit liquidity if approved by stakeholders.
Hodlnaut’s Judicial Management Procedure
Judicial management law in Singapore allows financially troubled firms to rehabilitate themselves. Crypto firms like Zipmex and Vauld opted for it recently and received three months to resolve their financial issues.
In this procedure, the court appoints a judicial manager for the troubled firm who takes charge of the company. The appointment of a judicial manager usually takes long, sometimes up to a few months. Therefore, until the court confirms, the company isn’t allowed to appoint an interim judicial manager to act temporarily in such a capacity.
Furthermore, the firm has filed for Tam Chee Chong of Kairos Corporate Advisory to be appointed as the interim judicial manager and, subsequently, the judicial manager. Hodlnaut stated that Chong has a wealth of experience and has helped various companies which underwent restructuring.
“Mr Tam Chee Chong has over 37 years of corporate and financial advisory experience and has worked in various Big 4 accounting firms over the years. With his experience and track record, we believe he will be able to execute our recovery plan and restructure the business effectively.”Hodlnaut said.
While Hodlnaut goes through judicial management, its clients’ funds remain stuck. Recall that the firm in February said it had more than $100 million in customer funds across over 1,000 users.
The crypto lender, in its statement, further said that it would provide more updates on Aug. 19.