Hodlnaut's creditors are seeking the firm's liquidation after rejecting a proposed restructuring plan.
In a filing dated 11 January by Hodlnaut's court-appointed interim judicial managers, creditors said liquidation better serves their interests.
The proposed restructuring plan that creditors objected to had allowed Hodlnaut's directors to continue managing the business.
One of the creditors, Algorand Foundation, wrote in the filing that liquidation should be executed as soon as possible "to maximize the company's remaing assets available for distribution."
On Friday, a hearing rejected an application to remove the interim judicial managers.
Hodlnaut halted withdrawals without warning on 8 August, one day before Singapore National Day after losing $190 million due to its exposure to LUNA despite claiming on a Discord server that it had zero exposure.
It then applied to the Singapore High Court to be placed under judicial management and was granted protection from creditors.
Read more: Hodlnaut “Downplays” LUNA Exposure, Loses Almost US$190M
The Singapore based crypto lender has been under investigation by the Commercial Affairs Department (CAD) for fraud offences.
Singapore Police Force (SPF) had also demanded Hodlnaut hand over US$127,245,996 worth of USDC and USDT from the account under Samtrade Custodian Limited.
The SPF said the CAD is investing Hodlnaut and its directors for offences under Sections 417 and 424A of the Penal Code 1871.
Read more: Hodlnaut Directors Could Face 20 Years in Prison
Under 417, the minimum penalty is “imprisonment for a period of up to 3 years and a fine, or either’ and those guilty under 424A could face up to 20 years in prison, a fine, or both.