Bullet Points:
• Hodlnaut creditors have rejected the proposed restructuring plan, preferring liquidation instead.
• An investigation revealed that Hodlnaut lost $190 million in the Terra crash.
• Algorand Foundation, one of the firm’s key creditors, has called for immediate liquidation and distribution of remaining assets.
Hodlnaut, the Singapore-based crypto lender, is now looking at a possible liquidation after its creditors rejected a proposed restructuring plan. The plan allowed the current directors to oversee the firm’s operations during the restructuring phase, but was rejected during a Jan. 12 hearing. Creditors believe that liquidation and distribution of remaining assets is the best option to maximize the remaining value.
The trouble first began for Hodlnaut in August 2022 when the firm suspended withdrawals, citing volatile market conditions and a lack of liquidity. However, further investigations revealed that the crypto lender had downplayed its exposure to the collapsed Terra ecosystem. The firm had lost nearly $190 million in the crash and the executives had even gone to the extent of deleting thousands of documents related to their investments to hide the exposure.
The rejection of the restructuring plan and the preference for liquidation has been pushed forward by Algorand Foundation, one of Hodlnaut’s key creditors. The Foundation has called for immediate liquidation and distribution of remaining assets among creditors to maximize the value of the remaining assets.
The future of Hodlnaut is now uncertain. Creditors have made their preference clear, but the fate of the firm will ultimately be decided by the court. However, it is clear that the crypto lender’s exposure to the Terra crash has caused it a lot of trouble, and the firm is likely to be liquidated if the creditors get their way.