Creditors of Singapore-based cryptocurrency lending platform, Hodlnaut, filed a court order via their judicial manager to suggest that the firm must be placed in liquidation and not restructuring. Among the creditors that reportedly oppose the restructuring includes Samtrade Custodian Limited, currently in liquidation and Algorand Foundation which holds claims estimated to be worth around $228 million Singaporean Dollars (USD$170 million).

The judicial manager's announcement highlights that the lender does not have any external investor to pour in fresh capital, thus leading to the preference of liquidation from the creditors. This suggestion was reiterated by the Algorand Foundation in a court filing, further elaborating that liquidation would lead to maximum amount of assets available for distribution.

At the beginning of September, the Algorand Foundation stated that their total exposure to Hodlnaut was around USD$35 million. The Algorand Token (ALGO) which is currently being traded dropped by 3.34% in the past 24 hours following CoinDesk data.

The holders of Hodlnaut, consisting mainly of institutional investors are now hoping that due to the drastic step of liquidation, they might be able to recover part of their investments. This legal tussle between the creditors, Hodlnaut and its investors is soon likely to solidify its fate.

Unstable financial standing had always been a significant issue for the Hodlnaut platform due to which it had long been struggling to gain investor confidence.It was founded by several cryptocurrency traders in 2017, the exchange found itself in a lose-lose situation by mid-2019 when it overall loans slowly begin to diminish and its investors slowly began to flee.

The Singapore based firm has been facing this legal crisis since April 2020, when its operations were put on a freeze. Following this, the Singapore court granted a moratorium before taking quasi-legal steps to freeze Hodlnaut’s existing assets. Since then, more than sixteen hearings have been conducted to decide over its fate, with liquidation being the most viable option for now.



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