Hodlnaut is in big trouble! Both, the Singapore Police Force, and the Attorney General, have decided to begin proceedings against the company. The reason is the downsizing of 80% of its staff. The company admitted to everything, in several blog posts.
The Case Against Hodlnaut
Hodlnaut has its headquarters in Singapore. The establishment offers unique financial services to individual investors. Cryptocurrency official trading platform stakeholders may lend money to genuine borrowers. In turn, the borrowers must pay interest on the principal amounts. Thus, Hodlnaut serves as a lending and borrowing platform.
Hodlnaut has been quite open about what is happening regarding it. It has been regularly uploading blog posts, for the public to view. A recent one declared that the establishment is eagerly working towards stabilizing its liquidity. It is also striving to reduce costs. Above all, it is struggling to remain headquartered at Singapore.
One of the measures the company has taken, is downsizing. It has already fired 40 employees. They represent 80% of the company’s staff. This move has created friction Hodlnaut and the Singapore Police Force. It has also brought about a confrontation between the organization and the Attorney General.
All that Hodlnaut is prepared to state is that certain actions are in progress. Furthermore, all of them are meant to be highly advantageous to users.
Other Strategies Undertaken by Hodlnaut
The company has worked out other plans too. For instance, it has gone in for reduction in the interest rate. It is now 0% APR (annual percentage rate).
Then again, the so-far flourishing company has suddenly brought all withdrawals to a halt. This took place in the earlier half of August 2022. The reason given, was, liquidity issues. They had cropped up as an outcome of adverse conditions in the global crypto marketplace.
The next step was filing for creditors’ protection. The idea was to gain protection, albeit temporarily, from legal claims and actions initiated by creditors. Such a filing would give the organization some breathing space. It would also be able to figure out strategies for recovery and rehabilitation.
According to the company’s announcement, it desires to prevent forced liquidation of digital assets. If such an action should go through, then, Hodlnaut would be forced to place users’ crypto accounts under sale. They would have to sell their tokens/coins, such as BTC, WBTC, and ETH, at lower prices than usual. The pricing fluctuations should be on display at Bitcoin smart.
Appointing a Judicial Manager
Not wanting any adverse outcomes, Hodlnaut is fully cooperating with the ongoing investigation. It is working closely with attorneys, for example. It does not wish to be forced into liquidating its digital assets, especially at the existing lowered prices.
On its part, the Singapore High Court has decided to appoint a judicial manager. This person will be acting as an independent officer. His duty involves taking charge of the firm’s management.
In contrast, the firm has also decided to appoint someone to take on the responsibility of a judicial manager. An application has been forwarded, with its choice being displayed on it.
The company wants to opt for Chee Chong Tam. This individual was Deloitte Southeast Asia’s former partner. Currently, he has a directorship in an organization. the company is Kairos Corporate Advisory. While the Singapore courts are reviewing the application, Tam remains the interim judicial manager.
Hodlnaut’s Explanations to the Public
Judicial management would serve to prevent liquidation of Ether and Bitcoin at extremely low prices. These prices are not what they were in 2021. Similarly, judicial management would assist the organization to implement its strategy for recovery. It would help it to move towards rehabilitation.
Liquidation involves the selling of all digital assets, first. Next, the money is distributed amongst all the users. The distribution is in alignment with each one’s holdings.
Hodlnaut knows that there are many users, who need funds urgently. Therefore, the company has a plan in the offing. It will permit users to remove their initial deposits. It will also allow them to take away their accrued interests. Users will be avail them in full, at discounted amounts. However, this will take time, for an officially appointed judicial manager must be in evidence. Only that manager can undertake such a decision.