Hodlnaut Reels Under Threat of Liquidation, Seeks Judicial Management

Friday gave way to several unpleasant surprises, Hodlnaut being one of them. Nearly insolvent, Hodlnaut tightened its grip to survive yet another crypto bloodbath. A few days ago, Hodlnaut had filed for creditor protection and judicial management- which was the only choice that it had to prevent liquidation since the platform had halted the transactions since August 8th. 

Moreover, to save resources, the company laid off 80% of its staff.

TerraUSD Crash To Blame?

The company declared that the TerraUSD crash was the reason for its current situation. 

The company’s Hong Kong subsidiary suffered losses during the TerraUST crash which led to an unpleasant and unpredictable situation for the company. 

Despite rumors on social media, Hodlnaut didn’t have any assets on another bankrupt crypto platform Celsius. The company confirmed this in its official blog message.

Hodlnaut goes to court

On August 18, the company’s lawyers attended the first case conference held under the Singaporean court system and the company relayed that the process has just begun. 

Consequences of a possible Hodlnaut Liquidation

According to Hodlnaut, the judicial management process that they have opted for is the best in the current scenario, as if the company is liquidated, the users might suffer greatly. 

Users would only be able to get a fraction of what they initially deposited, whether it’s BTC or ETH, or any other coin. 

The company assured the users that an interim manager will be appointed soon and will be holding a managerial level position in the company. This person will be responsible for taking decisions in the best interest of the users.

The court proceedings of this case might have a huge impact on the crypto industry, as there are at least 5 companies going through similar legal processes.

The company is putting in a lot of effort to protect itself from liquidation which includes protecting its crypto assets bitcoin org bitcoin org - Event OrganiserTechnologyPayment solution and Ethereum Ethereum - press@ethereum.org Blockchain NetworkTechnology which are already continuing to depreciate. The company further assured the users that they will be doing their best in the interest of their users.