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Potential buyers are interested in embattled crypto lender Hodlnaut following creditors’ preference for liquidation instead of restructuring.
According to new reports, potential buyers are making inquiries regarding the purchase of embattled crypto lender, Hodlnaut. These various interested parties have reached out to the interim judicial managers overseeing the company following its protection-seeking from creditors. The report further states that Hodlnaut’s judicial managers are signing non-disclosure agreements with these prospective investors. A given affidavit noted that the Hodlnaut Group allegedly owed a combined $160.3 million (62%) of outstanding debt as of December 9th. According to this affidavit, the creditors of the Singapore-based crypto lending platform include Algorand Foundation, Jean-Marc Tremeaux, Samtrade Custodian, and SAM Fintech.
It stands to reason that Hodlnaut creditors would hope for a swift resolution with the company’s potential buyers.
Hodlnaut halted withdrawals last August amid the crippling crypto rout that characterized much of 2022. At the time, the crypto lending and borrowing platform was among several prominent lenders that paused certain operations. Hodlnaut also suffered a substantial letdown following the sudden and dramatic collapse of the Bahamian-based exchange FTX. The one-time, second-largest crypto exchange globally accounted for around 72% of the digital assets Hodlnaut deployed on centralized exchanges. According to a November filing, this figure amounted to an estimated market value of 18.5 million Singaporean dollars, or $14 million.
In January, key Hodlnaut creditors turned down a proposed restructuring plan, favoring company liquidation instead.
Hodlnaut’s creditors, including the Algorand Foundation, reckon that restructuring plans would not best serve their interests. Furthermore, Algoarnd called for the immediate ‘winding down,’ liquidation, and distribution of the company’s remaining assets among creditors. According to Algorand, this suggested route maximizes the crypto lender’s remaining value.
Talks of Hodlnaut Potential Buyers Escalate Several Months after August 2022 Insolvency Crisis
Hodlnaut first encountered problems last August but downplayed its exposure to the collapsed Terra ecosystem. The Singapore-based crypto lender reportedly lost approximately $190 million, with executives expunging linked implicative documents to hide the exposure.
Also, in August 2022, Hodlnaut sought judicial management under Singapore law to avert forced liquidations. At the time, the company explained the need to protect itself from any creditor legal claims and proceedings, saying:
“We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies such as BTC, ETH, and WBTC at these current depressed asset prices. This pause will provide us with the breathing space to focus our efforts on the recovery plan to rehabilitate the company.”
However, Hodlnaut also reassured customers at the time that its assets remained, suggesting that it was only going through a difficult financial situation. Furthermore, Hodlnaut added:
“We will be exploring available solutions on allowing our users to tap into emergency exit liquidity, but these are currently still subject to discussions and approvals by various stakeholders.”
Last November, Hodlnaut’s case came under investigation by the Singaporean police regarding allegations of forgery and cheating. In an official statement, the country’s police force implored virtual token holders in the company who felt defrauded to reach out.