Hodlnaut Laid Off 80% Staff, Applies For Singapore Judicial Management

Due to dire financial conditions, cryptocurrency lending company Hodlnaut has reduced the majority of its personnel and sought to be put under judicial control.

The catastrophic situation was revealed on Friday by Hodlnaut, which provides interest-bearing cryptocurrency investment alternatives in verified institutions. High withdrawal volumes, the general decline in cryptocurrency markets, and losses incurred by the company’s Hong Kong affiliate after the infamous TerraUSD (UST) crash have all been blamed for the company’s precarious financial situation.

To avoid liquidating Hodlnaut’s Bitcoin (BTC) and Ether holdings

The business elected to apply for judicial management, which will see the Singaporean Court appoint a manager to oversee its accounts and operations (ETH).

Judicial management will also enable the business to implement a recovery plan and perhaps even undergo rehabilitation. According to the company’s announcement, it intends to return its asset-to-debt ratio to 1:1 so that users can withdraw their initial cryptocurrency deposits.

Hodlnaut also stated that it was considering giving users the option to close their accounts before withdrawing their initial investment and all accumulated interest. This is now up for the soon-to-be-appointed judicial manager’s approval.

By lowering burn rates, the company will take action to stabilize its liquidity. As of August 22, all open-term interest rates will be set at 0% APR. The business also acknowledged that it had laid off 40 workers.

Just a few weeks after Hodlnaut stopped allowing withdrawals and deposits on its platform, the application for Judicial Management will be submitted on August 22. Hodlnaut may have had exposure to Terra’s failing algorithmic stablecoin UST, according to on-chain analytics, despite the company’s insistence that it had no investment exposure to the now-bankrupt loan company Three Arrows Capital.

Hodlnaut added that the Singapore Police Force and the Attorney-General of Singapore were also parties to ongoing legal actions.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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