In a dramatic turn of events, the High Court of Singapore has put the final nail in the coffin for crypto lender Hodlnaut. The court has officially ended its judicial management, paving the way for liquidation that leaves the future of users’ funds in a precarious state. For those who can remember, funds have been frozen since August 2022, making it a long wait for many.

From Hope to Despair: A Journey Through Judicial Management

On November 10, the former interim judicial manager, Aaron Loh Cheng Lee, announced via a letter that he and fellow IJM Ee Meng Yen Angela have been relieved of their duties and are now officially liquidators. In an unfortunate twist, this transition is a sign that Hodlnaut is officially out of the rescue phase, and reality has taken a hard swipe at the hope users clung to.

The Court’s Decision and What It Means for Investors

• Winding-Up Order: The liquidation decision follows the issuance of a winding-up order by the court in response to the application by the IJMs. Interestingly, the specifics of this decision are currently sealed.
• Creditors Galore: Hodlnaut has an impressive roster of 17,000 creditors ranging from users to notable entities like Samtrade Custodian and the Algorand Foundation. User funds? Also locked away.
• The Market Mayhem: Stuck in a storm of industry-wide chaos, Hodlnaut wasn’t caught up with the infamous 3AC but did find itself holding about $150 million in the now-rebranded TerraUSD Classic (USTC) stablecoin.

The Rise and Fall of Hodlnaut

When Hodlnaut suspended deposits and withdrawals in August 2022, it came with a surprising statement attributing the decision to the ‘recent market conditions’. As if a reality show, viewers were glued to see how this would unfold. Yet, instead of enjoying a plot twist, they found themselves watching a slow-motion train wreck.

Efforts to Resuscitate: Missed Opportunities

After initially avoiding forced liquidation by seeking court-appointed IJMs, Hodlnaut underwent significant cutbacks, including an 80% reduction in staff. Despite these drastic measures, creditors shot down any restructuring proposals and overwhelmingly voted for liquidation earlier this year.

Once optimistic, OPNX—a rival firm launched by some former 3AC founders—offered a $30 million deal in FLEX tokens for a substantial share in Hodlnaut. However, that offer crumbled as the value of FLEX dropped a staggering 90% shortly after. Talk about timing, huh?

The Aftermath: Users Left in Limbo

The fallout from this saga doesn’t end with Hodlnaut’s liquidation. Users are left pondering the fate of their investments, which seem to have vanished into thin air. Meanwhile, other crypto lending platforms are also navigating stormy waters—recently, a U.S. court approved a bankruptcy plan for Celsius amid similar woes.

The Final Word

As Hodlnaut’s journey comes to a disheartening close, investors are left to grapple with lessons learned and the uncertain landscape of cryptocurrency lending. Was it a wrong turn, or is this merely the beginning of a reckoning that the larger industry should brace itself for? Only time will tell, but one thing is for sure: it’s going to be a bumpy ride.