Hodlnaut has announced that the platform has applied for to be placed under judicial management, so it can avoid liquidation, which would not be beneficial to its users. In an email on Friday, Hodlnaut said judicial management gives it the “opportunity to execute its recovery plan and rehabilitate the company.”
“The plan is aimed at restoring our asset to debt ratio to at least 1 and eventually allowing users to withdraw the full value of their cryptocurrency deposited with Hodlnaut,” the company said in an email to users on Friday.
Judicial management means that the judicial manager, that is appointed by the Singapore Courts, will step into the place of Hodlnaut’s management and make decisions on behalf and in the best interest of its users. The manger will have the ultimate decision-making power on all aspects of the company moving forward.
Read more: SG Hodlnaut Stakers Reveal Why They Didn’t Withdraw Ahead of Freeze
The company has also laid off about 40 employees, or 80% of its workforce, to reduce overheads, and disclosed that there are pending proceedings between Hodlnaut and the Singapore Attorney-General / Singapore Police Force, without elaborating on the case(s).
The hearing for its Interim Judicial Management application will be heard in the Singapore Courts on Monday, 22 August, while the next case conference for the Judicial Management application will be heard on 30 August.
Hodlnaut said it is exploring the possibility of allowing users to withdraw their initial deposit with accrued interest, at a discount, though this decision rests on the judicial manager. It will also change all open term interest rates to 0% APR from 22 August, 5pm to reduce its burn rate.
Over on an unofficial Hodlnaut chat on Telegram however, a group of investors are banding together and engaged lawyers from PD Legal regarding the recovery of their funds, with one claiming to have around US$2.3 million locked in his account.
Earlier this month, Hodlnaut, which claimed to have US$500 million AUM at the start of 2022, paused customer withdrawals, citing “recent market conditions.” It also withdrew its application for a digital payment token (DPT) license from the Monetary Authority of Singapore.