Embattled Crypto Lender ‘Hodlnaut’ Applies for Creditor Protection

Hodlnaut has become the second Singapore-based crypto lender to seek a protection order from creditors after filing an application with the Singapore High Court to be placed under judicial management:

Hodlnaut Joins Vauld, Zipmex in Unholy Trinity

Following in the wake of Vauld, which was granted a three-month protection order earlier this month after it too suspended withdrawals without notice in July, Hodlnaut’s application will temporarily safeguard the lender from any legal claims.

Hodlnaut and Vauld join crypto exchange Zipmex, also based in Singapore, in securing temporary creditor protection. Earlier this week, Zipmex successfully won its own three-month moratorium until December 2 to enable it to formulate a funding and restructuring plan.

Hodlnaut hopes that being put under judicial management will allow it too to devise a recovery plan to avoid liquidating customer assets.

What Is ‘Judicial Management’?

Judicial management is a law in Singapore under which financially troubled firms are given the opportunity to rehabilitate themselves. The court appoints a judicial manager who temporarily takes over from the company’s managing director.

The appointment of a judicial manager can take up to a few months. Until the court confirms who that might be, the company may apply to appoint an interim judicial manager to act on a temporary basis in the same capacity. Hodlnaut has nominated Tam Chee Chong, director of the financial consultancy firm Kairos Corporate Advisory, as its interim judicial manager.

With almost four decades’ experience in a corporate finance advisory capacity, Chong has performed the role of judicial manager in a range of companies that have undergone restructuring:

With [Chong’s] experience and track record, we [Hodlnaut] believe he will be able to execute our recovery plan and restructure the business effectively.

Hodlnaut announcement