The past few months have seen several cryptocurrency companies shut down and winded up over bankruptcy. A crypto lending company, Holdnaut, fell victim to the market situation three weeks ago after the debt ratio rose more than the asset.
The Singapore-based firm suspended its customers from withdrawing their funds and performing operations on its platform. Earlier, the company secured approval from a High-court to be under the creditor’s protection.
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Holdnaut Under Protection Amidst Operation Suspension
Three weeks after Holdnaut restricted its platform users from withdrawing their funds, the firm has secured protection from a court. The crypto company suspended all withdrawals from the user’s account and other operations on the 8th of August.
According to sources, the firm invested massively into the crashed TerraUSD stablecoin project, which hit below a cent in May. Holdnaut was among the many companies that fell victim to the Terra ecosystem crash. The firm immediately filed for protection aid from the court to void further loss and liquidations of the company assets and funds.
Earlier, the firm announced that a High-court had placed it under protection after it filed for a protection program. According to the court order, the company will be under close watch by the judiciary, which will monitor all activities on the platform.
The announcement was made via Holdnaut’s official website that the firm will be under neutral interim governance. The court appointed two officials from E.Y. corporate advisors to oversee the company’s activities. The officials, Loh Cheng Lee and Yen Meng Angela are the interim judicial manager of Holdnaut appointed by the court.
Crumbling Crypto Firms Filling For Court Protection Program
The market bears, consolidations, and liquidity are the key factors causing crypto companies to end up in debt and bankruptcy. The crumbling/troubled companies have filed for bankruptcy and financial protection to avoid further liquidations and losses.
However, these market bears have caused giant cryptocurrency companies to expand and extend their dominance in the cryptocurrency space globally. Crypto exchanges like; FTX, Binance, and other solution providers like Ripple have acquired/merged with several crumbling cryptocurrency companies.
The creditor protection program is a rebound aid provided by the Government or judiciary to save/aid companies. According to the Singapore constitution, companies that file for the program will be given the authority to suspend operations and recover losses.
Although, the court will appoint a neutral interim expert in the industry to work with the company’s board till full rehabilitation. Under this protection, Holdnaut has revealed its plan to reduce its debt, after which it would allow users to withdraw and access their funds. After rehabilitation and approval from the court, all suspended activities on the platform will be reactivated.