Hodlnaut, a troubled Singapore-based crypto lender, says it has released 80% of its workforce as it looks to execute a recovery plan after its financial health took a major hit.
In a blog post Friday, Hodlnaut said that it has laid off 40 employees (constituting 80% of the staff) since halting withdrawals. Per the company, the layoffs are necessary as the team tries to execute a recovery plan, with a reduction in expenditure among the first steps towards that.
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The distressed firm will also look to stabilise its liquidity further through a reduction of its burn rates. As such, “all open term interest rates” have been cut to 0% APR, with this set to take effect on 22 August, 5 pm Singapore time.
Part of the recovery plans the firm has put in place since being forced to pause customer withdrawals is to seek judicial management. In Singapore, this is a process involving the courts in which a firm seeks protection (a moratorium) from liquidation as it embarks on a recovery effort.
If the judicial application is successful, the company’s crypto holdings – Bitcoin (BTC/USD) and Ethereum (ETH/USD) – will not be liquidated in a manner that might impact customers, the firm’s statement noted. The process of acquiring an interim Judicial Manager has started, with the Singapore Court expected to hear the application beginning Monday, 22 August 2022.
Meanwhile, the company’s efforts to navigate the turmoil are likely also to depend on an ongoing investigation involving the Singapore police.
Hodlnaut did not provide specific details about the pending police proceedings, only noting that the “actions are taken in what we believe to be in the best interests of our users.”
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