Hodlnaut’s Creditors Rejected Reorganization Plan And Wanted Liquidation
- Hodlnaut’s creditors rejected the company’s plan to restructure the company and instead submitted a request for liquidation.
- Creditors consider this to be the best way to secure their interests.
- Terra’s May collapse caused the crypto company to collapse and stop withdrawing by August 2022.
The Singapore-based cryptocurrency company is struggling due to pressure from investigative agencies and creditors. Hodlnaut’s creditors rejected the plan at their structure but have instead asked to liquidate the company, according to Bloomberg.
Creditors argue that the proposed restructuring will only increase uncertainty about the company’s future. Meanwhile, a hearing on Friday rejected an application to remove the interim judicial directors. The group of creditors objected to a provision in the restructuring plan that would allow directors who had presided over the faltering Hodlnaut to continue running the business.
In November, the Singapore police force investigated Hodlnaut and its directors for possible fraud and fraud. According to a statement from the police, the investigation has been initiated due to multiple false claims about the company’s exposure to a particular digital token.
This month’s earlier disclosure by the exchange that it still owns approximately $13.3 million worth of crypto in the now-defunct FTX exchange dealt a further setback to its recovery efforts.
At this point, they requested the liquidation of the crypto company. They said their interests are best served by dissolving the company, according to a January 11 filing by Hodlnaut’s court-appointed interim judicial managers.
The Algorand Foundation, one of the creditors, stated in the document that action should be taken as soon as possible to maximize the use of the company’s remaining distributable assets. Meanwhile, Friday’s hearing rejected an application to remove the interim judicial administrators.
The company downplayed its exposure to Do Kwon’s collapsed Terra digital token ecosystem but, in fact, suffered a loss of nearly $190 million. Several crypto lenders worldwide boomed in last year’s digital asset routine.
Singapore-based Hodlnaut, which also has operations in Hong Kong, halted withdrawals in August and is protected by creditors.
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