Struggling Hodlnaut to negotiate its sale and FTX claims with potential buyers

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Key takeaways:

  • According to reports, the prospective purchasers and Hodlnaut’s court-appointed judicial managers are signing non-disclosure agreements.
  • The activities of cryptocurrency lenders, including Celsius Network, BlockFi, Genesis, Vauld, and others, have been hampered by the 2022 cryptocurrency winter.

According to Bloomberg on February 6, many prospective bidders have enquired about purchasing Hodlnaut and its claims against the defunct cryptocurrency exchange FTX.

Following the company’s request for creditor protection, Hodlnaut’s interim judicial management has received numerous offers to purchase the Singapore-based cryptocurrency corporation. The report mentions that the judicial managers are currently engaged in concluding non-disclosure agreements with the potential investors, citing an affidavit.

According to the affidavit, as of December 9, 2022, Hodlnaut Group owes Algorand Foundation, Samtrade Custodian, SAM Fintech, and Jean-Marc Tremeaux a total of $160.3 million, or 62% of the outstanding debt.

As was previously mentioned, Hodlnaut has 514 Bitcoin, 1,395 Ether, 280,348 USD Coin tokens, and 1,001 FTX tokens on his FTX accounts. According to reports, the corporation possessed digital assets valued at more than $18 million on controlled exchanges like FTX, Deribit, Binance, OKX, and Tokenize.

A severe bear market in 2022 led Hodlnaut to stop operations due to a shortage of money. A Singapore court granted Hodlnaut creditor protection after it had frozen withdrawals in August, enabling the company to restructure under the watchful eye of the court. As temporary judicial managers, the court selected Ee Meng Yen Angela and Aaron Loh Cheng Lee from EY Corporate Advisors.

The information was released a few weeks after Hodlnaut’s creditors demanded the platform’s assets be liquidated and rejected the suggested restructuring plan. To maximize the value of the remaining assets, the creditors reportedly demanded a rapid liquidation and distribution of the remaining assets among the creditors.

According to a November 2022 filing, FTX held 72% of the assets Hodlnaut used on centralized exchanges, worth $14 million. In the meantime, Hodlnaut’s creditors rejected a restructuring proposal in January and said they would prefer to liquidate the failed company.

One of the many businesses offering crypto lending services is Hodlnaut, which lets users deposit cryptocurrency lent to borrowers in exchange for consistent interest payments. The operations of cryptocurrency lenders such as Celsius Network, BlockFi, Genesis, Vauld, and others have been hampered by the 2022 cryptocurrency winter. However, there are still vital requirements that must be satisfied for crypto financing to survive the bear market, according to several industry professionals.

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