Hodlnaut, a crypto lender and borrower based in Singapore, said on Tuesday that it has asked to be put under judicial administration in order to reorganise its business.
After putting a temporary stop to withdrawals, swaps, and deposits last week, the crypto business said it sent the case to Singapore’s High Court.
A dramatic selloff in crypto assets, which began in May with the crash of two paired currencies (Luna and TerraUSD), has now hit Hodlnaut.
Hodlnaut acknowledged that it was in a “tough financial situation” and said that it was working with lawyers to fix its finances and that “not all your assets are gone.”
The company has said that it doesn’t want to be forced to sell off its assets because that would force its customers to sell their cryptocurrencies at “suboptimal” prices.
No specific date was given by the corporation for the resumption of withdrawals. It has indicated it is looking into methods to provide people access to emergency exit liquidity, but that doing so is contingent on consent from a number of different parties.
JUST IN: 🇸🇬 #Crypto lender Hodlnaut files for creditor protection in Singapore.
— Watcher.Guru (@WatcherGuru) August 16, 2022
Effect of crypto crash on Hodlnaut
Following the collapse of leveraged bets and the $40 billion wipeout of the Terraform Labs ecosystem and linked stablecoin, Hodlnaut is the latest cryptocurrency startup to be shaken by the rout in the digital-asset market this year.
In 2019, Hodlnaut launched a service that enables cryptocurrency holders to earn interest by lending out a portion of their tokens. In February, the company said that its 1,000+ customers together had more than $100 million in client cash, up from a year earlier’s total of $1 million.
However, it is still rather tiny in comparison to others; the defunct lender Celsius had over $20 billion in assets and over 1.7 million customers.