Singapore-based Hodlnaut filed a wind-up order with the court on Nov. 10 as it prepares for a full liquidation of its remaining assets, according to court documents.

The winding-up process will be carried out under the provisions of the Insolvency, Restructuring, and Dissolution Act of 2018 and is expected to begin in the coming weeks.

The move comes after more than 17,000 creditors chose to vote against a restructuring plan for the company in January, opting for liquidation instead. Under the plan, the directors who were leading the company when it collapsed would have been in charge of the restructuring.

Liquidation process begins

In a circular addressed to the stakeholders, the company’s former interim judicial managers, Aaron Lee and Angela Ee, revealed that they had been discharged as interim judicial managers and subsequently appointed as joint and several liquidators by the High Court of Singapore.

The liquidators emphasized the challenges posed by the substantial volume of creditors, including the extensive Hodlnaut user base. They assured creditors that efforts would be made to consolidate responses to individual queries and provide regular updates.

However, the liquidators also clarified in their communication that the liquidation proceedings do not constitute an admission of any outstanding sums owed by the company to its creditors.

Exposure to Terra, FTX

Hodlnaut, which provided cryptocurrency lending services, faced financial turmoil in August 2022 and was forced to apply for creditor protection after incurring losses of approximately $189 million, primarily due to its exposure to the Terra ecosystem.

TerraLUNA collapsed in May 2022 and caused billions in losses for investors worldwide, including companies like Hodlnaut.

The crypto lender also suffered a setback of $13.3 million in crypto assets that were frozen on FTX when withdrawals were halted before the exchange filed for bankruptcy in November 2022.