Hodlnaut founders want to sell the company to potential investors: report

Hodlnaut founders want to sell the company to potential investors: report

Hodlnaut was one of many firms hit hard by the FTX collapse last November, although the first signs of a rift date back at least to May, when the company lost nearly $190 million due to the collapse of the Terra ecosystem.

Although Hodlnaut had previously downplayed its involvement, in August it was forced to halt redemptions and hire external interim managers, while simultaneously cutting 80% of its employees as part of its cost-cutting measures. But a new affidavit revealed that Hodlnaut is ready to sell the company.

Search for “White Knight Investors”

The interim legal managers appointed to oversee the restructuring last summer released the sixth affidavit in which their co-founder Simon Lee suggested that selling the company would serve the best interests of creditors rather than liquidating the firm. In this regard, Lee, along with another co-founder, Zhu Juntao, has reportedly contacted several potential “white knight investors,” according to a Bloomberg report.

Lee reportedly said Hodlnaut's co-founders believe such a business transaction would "maximize" value for creditors. He also emphasized that the company's user base "can be acquired and onboarded on digital asset platforms owned or affiliated with such investors."

It was previously reported that potential buyers have expressed interest in Hodlnaut. As a result, the interim legal managers of the Singapore-based lender have been contacted by several parties in this regard.

The development comes nearly two months after Hodlnaut creditors rejected a proposed restructuring plan. Instead, the group of creditors, including the Algorand Foundation, believed that dissolving the company and liquidating its assets was the better option.

Hodlnaut hit by investigation

Singapore law enforcement launched an investigation into Hodlnaut in November. As previously reported, police suspect that the crypto lender's top executives may have defrauded users and committed other crimes over the years.

Previously, numerous reports surfaced accusing the company's directors of making "misrepresentations regarding the company's exposure to a particular digital token."

As of December 9, Hodlnaut Group had $160.3 million in outstanding debts to several companies and entities.

.