Singapore-based cryptocurrency lending platform Hodlnaut has been ordered by the High Court to liquidate, according to a court document dated November 10.
The court appointed Aaron Loh Cheng Lee and Ee Meng Yen Angela, both from corporate advisory firm EY, as the joint liquidators of Hodlnaut. This comes after the two were appointed as interim judicial managers on August 29 to oversee the struggling startup.
Hodlnaut faced significant losses amounting to approximately $190 million due to its investments in the Terra ecosystem, which experienced a dramatic collapse.
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Decrypting DeFi is Decrypt's DeFi email newsletter. Art: Grant Kempster Amid the craziest week in crypto ever, the collapse of Terra's UST stablecoin and governance token LUNA emerged as the biggest story. Amid the crash, LUNA, formerly a top 10 coin by market cap, fell 100% to fraction of a fraction of a cent, and UST, designed to stay pegged at $1, bottomed out at 13 cents. So what the hell happened? Grab your coffee, you're going to need it. There were several forces at work. The first is the...
A judicial report suggested that the company's directors had not fully disclosed the extent of its engagement with the Terra/Luna platform before and after its downfall in May 2022. The situation placed Hodlnaut alongside other financial entities like Celsius, Voyager Digital, and Three Arrows Capital, which similarly suffered from their involvement with Terra's algorithmic stablecoin UST.
The crisis led Hodlnaut to halt customer withdrawals in July 2022, citing market conditions and a need to preserve assets. By August, the Singapore High Court intervened, assigning two interim judicial managers from EY Corporate Advisors to oversee the firm's restructuring.
Crypto Lender Hodlnaut Lost Almost $190 Million in Terra Crash: Report
A judicial report has reportedly revealed that crypto lender Hodlnaut lost around $189.7m due to its exposure to the Terra crash. According to Bloomberg, the report, penned by interim judicial managers appointed by the Singapore High Court, alleged that Hodlnaut’s directors “downplayed the extent of the group’s exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022”. The Singapore-based firm, founded in 2019, joins the likes of Celsius, Voy...
In today's court order, WongPartnership LLP, acting on behalf of the interim judicial managers, stated that at a November 10 hearing, "the Honourable Court made the following orders: A winding up order be made against the Company; Aaron Loh Cheng Lee and Ee Meng Yen Angela...be appointed as the joint and several liquidators."
When it was still operating, the platform had offered interest rates as high as 12.73% on deposits. Now, Hodlnaut said it has over 17,000 platform users who are now owed funds.
With the liquidation order, the chances of Hodlnaut users recovering their deposits remain unclear. The liquidators said responding to individual queries may not be practical given the large volume of creditors. They plan to provide bulk updates online instead.
Editor’s note: This article was written with the assistance of AI. Edited and fact-checked by Stacy Elliott.
