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Crypto platform Hodlnaut applies for judicial management in Singapore

Claudia Chong
Published Tue, Aug 16, 2022 · 03:44 PM

DISTRESSED crypto platform Hodlnaut has applied to the Singapore High Court to be placed under judicial management, becoming the latest company to turn to the courts after the Terra-Luna collapse sparked a devastating domino effect.

The company is aiming to avoid a forced liquidation of its assets, which would require it to sell users’ cryptocurrencies at depressed prices, it said in an announcement on Tuesday (Aug 16).

Hodlnaut halted user withdrawals, token swaps and deposits on Aug 8. It said it has informed the Monetary Authority of Singapore (MAS) that it intends to withdraw its application for a Major Payment Institution licence that allows companies to offer crypto services.

MAS in March had given in-principle approval to Hodlnaut for the licence, which regulates the platform’s token swap feature. MAS has since rescinded the approval.

Hodlnaut on Tuesday said it believes undergoing judicial management would provide the best chance of recovery for the company. The judicial management application provides a moratorium that temporarily shields the company against legal claims and proceedings.

Hodlnaut has applied for Tam Chee Chong of Kairos Corporate Advisory to be appointed as the interim judicial manager and subsequently, the judicial manager tasked with managing the company’s recovery plan.

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Hodlnaut’s next update will be on Aug 19, where it aims to provide more substantive updates on the judicial management process, it said.

It joins a group of companies attempting to restructure their businesses following the crypto fallout.

Crypto exchange Zipmex was granted a 3-month moratorium by the High Court on Monday after it was hit with US$53 million in exposure to Babel Finance and Celsius Network.

Defi Payments, an applicant for a Singapore digital payment token licence, is also under a moratorium as it seeks to restructure debt of US$402 million owed to about 147,000 creditors across the globe.

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