Last Updated on August 16, 2022 by Bitfinsider

Hodlnaut, a cryptocurrency lender that just stopped accepting withdrawals, submitted an application in Singapore to be given creditor protection.

According to a statement posted on Hodlnaut’s website on Tuesday, the decision allows for a short-term suspension of legal actions and claims so that the business can concentrate on a recovery strategy and rehabilitation. It claimed that as of August 13 it has submitted the application for the alleged judicial management to the Singapore High Court.

Hodlnaut acknowledged a “difficult financial situation,” but added that it is actively working with attorneys to stabilize its financial situation.

The company stated that it is attempting to prevent a forced asset liquidation, which would be “suboptimal” as it would necessitate selling its clients’ cryptocurrencies at a loss.

The corporation did not give a specific date for when withdrawals would resume. The company is looking on measures to enable users to access emergency exit liquidity, although it has stated that they are subject to clearance by different parties.

The collapse of the digital asset market this year, which included leveraged bets going bust and the $40 billion destruction of the Terraform Labs ecosystem and associated stablecoin, has affected a number of cryptocurrency companies, including Hodlnaut.

Hodlnaut launched in 2019 and allowed users to lend out their tokens to earn interest on their cryptocurrency. The company reported having more than $100 million in customer cash spread across more than 1,000 users in February, an increase from $1 million in the prior year.

In comparison, the bankrupt lender Celsius amassed more than $20 billion in assets and more than 1.7 million members.

Hodlnaut stated that it has submitted an application for Tam Chee Chong of Kairos Corporate Advisory Pte to be appointed as judicial manager and that it will provide another update on August 19.

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