Hodlnaut Files for Judicial Management to Avoid Forced Asset Liquidationby Fintech News Singapore August 17, 2022
Cryptocurrency platform Hodlnaut has filed an application with the Singapore High Court to be placed under judicial management on 13 August 2022 to avoid forced liquidation of its assets.
The firm called it a “suboptimal solution” that will require it to sell its users’ cryptocurrencies such as BTC, ETH and WBTC at the current depressed asset prices.
Judicial management is a mechanism under Singapore law for companies under financial distress to rehabilitate their business.
In this process, an independent officer of the court, also known as a Judicial Manager, is appointed in place of the company’s directors to manage the company.
In addition, the judicial management application provides a moratorium against legal claims and proceedings against Hodlnaut.
Hodlnaut believes that the pause will provide it with the breathing space to focus its efforts on the recovery plan to rehabilitate the company.
Pending the appointment of a Judicial Manager by the Singapore Court, the court may appoint an Interim Judicial Manager to act in such a capacity.
Hodlnaut has applied for Tam Chee Chong of Kairos Corporate Advisory Pte Ltd to be appointed as the Interim Judicial Manager and subsequently, the Judicial Manager.
He has over 37 years of corporate and financial advisory experience and has worked in various Big 4 accounting firms over the years. Tam has taken on the role of Judicial Manager in various companies which underwent restructuring.
These applications, though filed, have not yet been heard in court and may be subject to change depending on the outcome of the court hearings.
Hodlnaut was unable to provide a definite date as to when it will be able to re-enable withdrawals. This decision lies with the Judicial Manager, or Interim Judicial Manager.
Just last week, the crypto lender announced that it will be halting withdrawals, token swaps and deposits with immediate effect. Hodlnaut also withdrew its Major Payment Institution License application from the Monetary Authority of Singapore (MAS).