Cryptocurrency lender Hodlnaut faces imminent closure as Singapore's High Court has terminated its administration and ordered the company into liquidation. The move comes after user funds were frozen in August 2022. The former interim judicial manager (IJM) of Hodlnaut, Aaron Loh Cheng Lee, revealed in a letter on November 10 that he and IJM colleague Ee Ming Yen Angela had been relieved of their positions and appointed as liquidators. The Singapore Court made the liquidation decision based on their application, and it has now been finalized.
Hodlnaut, based in Singapore, had suspended deposits and withdrawals on August 8, 2022, while also withdrawing its license application to the Monetary Authority of Singapore, citing "recent market conditions." The company's creditors include around 17,000 users, with major creditors such as Samtrade Custodian, S.A.M. Fintech, and the Algorand Foundation. Hodlnaut, like many others in the industry, faced challenges amid the systemic upheaval, including the collapse of the Terra ecosystem and Three Arrows Capital (3AC). Although it had no exposure to 3AC, Hodlnaut reportedly held around $150 million in the Terra stablecoin, later renamed TerraUSD Classic (USTC), which faced financial turmoil following the collapse of FTX.
To avoid forced liquidation, Hodlnaut had applied for and accepted a court-appointed IJM, gaining creditor protection and reducing its workforce by 80%. The company is reportedly under police investigation for delays in reporting its stake in the University of Science and Technology of China. In January, creditors rejected Hodlnaut's restructuring plan, and in April, they overwhelmingly voted in favor of liquidation. In August 2023, OPNX, founded by former 3AC founders Su Zhu and Kyle Davies, offered $30 million worth of FLEX tokens in exchange for a 75% stake in Hodlnaut, but the offer was rejected by the IJM the following month, leading to a 90% decline in FLEX tokens.
