Troubled Crypto Lender Hodlnaut Fires 80 Percent of Its Employees to Cut Expenses

Cryptocurrency lender Hodlnaut, which is sunk in financial woes, said there are "pending proceedings" between the firm and the Singapore authorities, although it did not reveal more. In a statement issued on Friday, it said the proceedings involve the Attorney-General's Chambers and the Singapore Police Force, adding that it is unable to disclose any further information on the matter. Hodlnaut also said it has laid off about 40 people, or 80 percent of its staff. The remaining team is needed to help with key functions.

In a recent blog post, the company stated that it is currently working on plans to stabilise its liquidity, cut costs, and remain in Singapore. As part of the measures, Hodlnaut has laid off 40 of its employees, representing 80 percent of the staff. In addition, it has reduced its interest rate to 0 percent APR. In a question-and-answer section of its blog post, Hodlnaut admitted that there is a pending proceeding between the company and the Attorney General as well as the Singapore Police Force.

“There are pending proceedings between Hodlnaut and the Singapore Attorney-General / Singapore Police Force. However, while Hodlnaut is unable to disclose any information in this regard, these actions are taken in what we believe to be in the best interests of our users,” the company wrote.

The post further disclosed that the embattled company has applied to be placed under judicial management. Once approved, the “ultimate decision-making power on all aspects of the company moving forward” would be handed to the judicial manager.

The company further explained that judicial management would help it avoid liquidation of its Bitcoin and Ether holdings at current prices, which are far from their all-time highs recorded in 2021. It is important to note that all assets are sold first and distributed to users in proportion to their holdings in the event of liquidation. In addition, judicial management would enable the company to execute its recovery plan and embark on rehabilitation.

Hodlnaut also stated that they understand the users' need to urgently access their funds. For this reason, they are planning to allow users to withdraw their initial deposits as well as the accrued interests in full at a discounted amount. However, they will have to wait since the company is already applying for judicial management. In this case, the Judicial manager would make such a decision.

"This process will need to be reviewed and approved by the Judicial Manager if he is appointed," they wrote.