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The Singapore High Court has received an application from cryptocurrency lending site Hodlnaut to place it under judicial management, which is a kind of creditor protection.
The application was submitted on August 13, five days after the firm froze withdrawals, per a statement on Hodlnaut's website. The application will provide the lender with a temporary barrier against any legal claims.
In addition to Singapore-based exchange Zipmex receiving creditor protection on Monday and trading firm Three Arrows Capital owing billions of dollars to creditors after imploding due to leverage in June, Hodlnaut is the latest in a long line of cryptocurrency businesses to be hurt by the recent market downturn.
Hodlnaut anticipates that being placed under judicial administration will provide it the opportunity to develop a recovery strategy rather than selling off customer assets.
In the statement, it was stated that "we are seeking to avoid a forced liquidation of our assets as it is a poor solution that will oblige us to sell our customers' cryptocurrencies at these current low asset prices."
The entire procedure is anticipated to take "a few months," and on August 19 Hodlnaut will give another update.
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