Terra Ecosystem Crash Affects Crypto Lenders
Following the crash of Terra’s ecosystem 18 months ago, several digital asset companies, including crypto lenders like BlockFi, Celsius, and Hodlnaut, suffered significant losses. Whether due to direct exposure to the failed project or mismanagement, these companies struggled to recover and compensate users. Hodlnaut, a Singapore-based crypto lender, has now been ordered into liquidation instead of restructuring.
Hodlnaut’s Losses and Liquidation
- Reports from 2022 indicated that Hodlnaut lost nearly $200 million after the UST crash rendered it essentially worthless.
- Court documents later revealed that the company’s management concealed evidence of its entire exposure to Terra. Despite this, creditors and judicial managers voted for liquidation instead of potential restructuring.
- According to a court filing from Nov 10 with the High Court of Singapore, creditors have received their wish as the former interim judicial managers confirmed the decision for liquidation.
The Company has a substantial volume of creditors (including over 17,000 platform users), and as such, responding to all creditor queries individually may not be practicable or economical. The Liquidators will instead consolidate their answers to creditor queries within their updates to all potential creditors. The Liquidators will continue to endeavor to update creditors regarding the administration of the Company as regularly as possible via email and broadcast the same on our website.
Hot Take: Hodlnaut’s Liquidation Decision
The decision for Hodlnaut’s liquidation comes after a period of struggle following the crash of Terra’s ecosystem. With over 17,000 platform users affected by the company’s losses, the move towards liquidation reflects a significant development in the aftermath of this crisis.
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