Distressed crypto lender Hodlnaut starts liquidation in Singapore

Quick Take

  • Hodlnaut will be liquidated in Singapore after a failed attempt to restructure.
  • The firm lost money in the Terra/Luna crash and FTX collapse last year.

Hodlnaut, a Singapore-based crypto lending firm, will be liquidated by its previously appointed judicial managers, according to a document published by auditing firm EY. 

The document, submitted by the liquidators and first reported by CoinDesk, says the judicial managers filed a winding-up order against Hodlnaut on Nov. 10. Hodlnaut tried to avoid liquidation earlier but was met with resistance from creditors.

The firm held over $13 million in assets in the now bankrupt FTX exchange and lost $189.7 million in the Anchor Protocol, the failed DeFi platform for the Terra stablecoin UST, which lost its peg last spring.

Salvage attempt

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Last August, Hodlnaut informed its 17,000 users that it halted withdrawals from the platform and pulled its license application with the Monetary Authority of Singapore. The company also applied to be put under judicial management so that it wouldn't have to sell crypto assets in a forced liquidation. Aaron Lee and Angela Ee were appointed as the judicial managers.

The company laid off 80% of its staff and informed users of a pending investigation by the Singapore police. The investigation started in November, with the police saying Hodlnaut made "false representations relating to the company’s exposure to a certain digital token."

Creditors rejected the restructuring plan in January, saying they preferred liquidation. In particular, Algorand Foundation, one of the creditors, wrote in a filing that liquidation will "maximize the company’s remaining assets available for distribution," according to Bloomberg.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Anna is a senior policy reporter at The Block. She has a background in political journalism and covered Russian civil society for a range of news outlets in Moscow, including the award-winning newspaper Novaya Gazeta. Before joining The Block, Anna spent the past five years investigating cryptocurrency policies and adoption around the world at CoinDesk. Anna owns bitcoin and a gift NFT of sentimental value.

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