The Singapore-based crypto-lending platform Hodlnaut will be liquidated. EY said this, citing the court decision.
In August 2022 the platform suspended withdrawals, swaps and token deposits. Subsequently Hodlnaut applied for judicial management to stabilise its financial position.
The company reported a capital shortfall in the amount of $193 million and cut 80% of staff to stabilise costs.
At the end of the month EY staff Aaron Lo Chen Li and E Meng Yen Angela were appointed by the High Court as temporary administrators of Hodlnaut. According to the court’s latest decision, the pair will act as liquidators with the power to appoint external specialists to assist with the process.
The liquidity crisis at the platform was triggered by a loss of about $190 million following the collapse of the Terra ecosystem in May, as revealed during bankruptcy proceedings. Managers at the time noted that the firm had concealed the true scale of risks associated with its UST position both before and after the well-known events.
According to the liquidators, Hodlnaut has a “significant volume of creditors,” including more than 17,000 users of the lending platform.
They did not disclose prospects for satisfying claims against the company. In their view, responding to individual creditor requests may be “economically impractical.” Therefore the liquidators intend to consolidate information and publish updates for all.
Earlier in January, the court began considering the possibility of winding up Hodlnaut after creditors rejected the platform’s restructuring plan.