Hodlnaut, a Singapore-based crypto lender, updated the community on its judicial management filing as well as announced two troubling updates.
First, the platform announced cutting 80% of its staff, roughly 40 people, “to reduce the company’s expenditure.”
Today’s statement indicated that the remaining employees were “necessary” for current operations.
Second, and perhaps more troubling, was the news that Hodlnaut is fielding pending proceedings with the Singapore Attorney-General and the Singapore police force. The crypto lender added, "these actions are taken in what we believe to be in the best interests of our users.”
The crypto lending firm has yet to respond to Decrypt for more information.
Last week the company filed for judicial management in Singapore, which would see an independent third-party oversee the firm’s operations as well as temporarily protect Hodlnaut from any legal claims.
The latest update also highlighted how filing for judicial management would help the company and benefit the users “in the long run.”
The application would see that the firm needn’t liquidate its current Bitcoin and Ethereum holdings at a time when prices are especially low. After that, Hodlnaut’s objective is to restore the asset-to-debt ratio, which would eventually allow the firm to unfreeze assets.
On August 8, Hodlnaut tweeted that it would freeze withdrawals, deposits, and token swaps on the platform stating that “this difficult decision was taken for us to focus on stabilizing our liquidity and preserving assets, while we work to find the best way to protect our users’ long-term interests.”
Singapore takes center stage in lending crisis
With so many lending firms and crypto funds having ties in Singapore, the city-state has had a busy bear market.
On July 22, cryptocurrency exchange Zipmex filed for bankruptcy protection in Singapore to avoid legal action from creditors after freezing withdrawals.
Singapore regulators are also hot on the heels of Three Arrows Capital, the now-insolvent crypto hedge fund that had defaulted on its loans to other major crypto lenders.
The Monetary Authority of Singapore (MAS) reprimanded the fund, too, “for providing false information to MAS and exceeding the assets under management (AUM) threshold allowed for a registered fund management company (RFMC).”
The MAS has also been vocal about establishing new guardrails for crypto users so as to better prevent additional freezes and platform woes.