Majority of creditors want Hodlnaut liquidated

Creditors of the Singapore-based cryptocurrency lender have reiterated their desire to liquidate the company, which is under judicial control from August 2022. Cyclic update cases.

Circular from IJM dated 25 April Said Users, who account for about 55.38% of creditors, have claimed S$228.3 million (approximately $170.5 million), indicating a preference for liquidation over restructuring. Despite the founders’ efforts to find new investors, no new sources of funding have been found, the letter notes.

“There have been no indications of White Knight investors so far and therefore no prospect of new capital injections.”

Only 2.42% of users with claims were in favor of restructuring, almost all of those claims were made up of company directors, and the arbitration proposal was opposed by “major” creditors. Key creditors include Samtrade Custodian and SAM Fintech, which are in liquidation, and the Algorand Foundation. Algorand has $35 million in exposure to Hodlnaut.

A Singapore court ordered IJM to “liquidate” the company and apply for dismissal, according to the letter.

RELATED: Hodlnaut Founders Propose Company Sale Instead of Liquidation

Hodlnaut has announced that it will suspend withdrawals on August 8, 2022 due to the liquidity crisis. The following week, he applied for judicial control and was temporarily protected from legal claims under Singapore law. “We aim to avoid forced liquidation of assets. […] We need to sell users’ cryptocurrencies such as BTC, ETH and WBTC at the current depressed asset prices,” the company said at the time.

Aaron Loh Cheng Lee and another IJM partner with EY Corporate Advisors.

nice to see #Algorand Involved in not one but two lawsuits in Singapore.

Hoddlenaught $35 million
3AC $53.5m (waiming up application denied)

For a non-profit foundation with limited runways to build Algorand, this is a huge loss. https://t.co/8cNsYapxxA

— Pukimaku (@Pukimakinc) April 16, 2023

The company was reportedly under police investigation for misrepresenting its exposure to the Terra stablecoin, now called TerraUSD Classic (USTC). On-chain data indicates that the company held at least $150 million worth of worthless coins despite claims to the contrary. Company executives have deleted thousands of documents to hide their disclosure.

Creditors began seeking liquidation of the company in January.

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