BlocksInform
The distressed crypto lender based in Singapore is considering a potential liquidation as the company's creditors have rejected the proposed restructuring plan and are looking to liquidate the platform's assets.
The creditor group rejected an offer of a restructuring plan that allowed existing directors to oversee the company's operations during the restructuring phase. Nevertheless, a January. 12 hearing rejected an application to remove the interim judicial managers, reported Bloomberg.
The creditors take the view that the restructuring plans are not aid and that it is in their interest to liquidate the company's remaining assets. Algorand Foundation, one of the primary creditors of the Singapore-based crypto lender, requested the immediate liquidation and distribution of the remaining assets between the creditors in order to maximize the remaining value.
Hodalnut’s trouble first surfaced in August last year when the firm suspended withdrawals citing volatile market conditions and a lack of liquidity. However, it was later revealed that the crypto lender minimized its exposure to the failed terra-luna ecosystem and lost almost $190 million in the first crypto contagion. Executives subsequently removed thousands of investment-related documents to conceal their exposure.
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The crypto lender requested judicial management under the laws of Singapore to prevent forced liquidations. The firm was eventually placed under a creditor protection program in August with hopes of utilizing the management period to restore its asset-to-debt ratio to 1:1 and allow users the ability to withdraw their initial cryptocurrency deposits. However, the court management program subsidized by the government did not help him for a long time.
Later in November, the company and its founders were surveyed for underestimating their exposure to some crypto tokens and false factual statements. The inquiry was based on several investor complaints from August to November 2022.
The Hodlnaut and Algorand Foundation did not respond to Cointelegraph's time-of-the-day request for comment.
