Hodlnaut, the cryptocurrency firm that deals in lending, recently cut a large section of its workforce, and has also applied to be considered under judicial management due to bleak financial circumstances. The company, which usually offers interest-bearing cryptocurrency investment options in vetted institutions, recently confirmed its dire state on Friday.
The poor financial situation of the company has been the direct result of multiple losses that were suffered by its Hong Kong subsidiary during the infamous crash of TerraUSD, which was then coupled with massively high volumes of withdrawals, along with the general downturn across most cryptocurrency markets. The company also opted to apply for judicial management, which would see the Singaporean Court put out a new manager that would review the accounts and the activities as a last resort in order to avoid the liquidations of the company holdings.
Hodlnaut Has Several Plans That Are In Motion
Judicial management could also allow Hodlnaut the chance to enact a recovery plan and also potentially rehabilitate the company. A statement from the firm went on to note that it had plans of restoring the asset-to-debt ratio to 1:1 which would allow users the ability to start withdrawing their initial deposits of cryptocurrency. The company also went on to note that it had been exploring the option that would allow the users to start withdrawing initial deposits with interest that was accrued in full before closing their accounts with the company.
Hodlnaut will definitely be taking multiple steps in order to stabilize the liquidity potential of the company by reducing the number of burn rates, which would then see all open-term interest rates getting changed to 0% APR from the 22nd of August. The company also went on to confirm that it had already retrenched close to 40 employees- which would account for around 80% of the entire team.