Cryptocurrency lender Hodlnaut is trying to quash a Singapore police order to hand over its balance of assets, while facing opposition in its pick of an interim judicial manager.
The Singapore Police Force (SPF) on July 14 issued an order for Hodlnaut to transfer the group's balance of assets of US$127.2 million (S$177.6 million) worth of stablecoins USD Coin and Tether to the SPF.
The assets are held on the Hodlnaut platform by Samtrade Custodian, a user contractually on-boarded with Hodlnaut Hong Kong. Samtrade Custodian is currently under judicial management, which is a form of debt restructuring.
"Based on the Hodlnaut Group's assets at the time and as of Tuesday, if Hodlnaut complies with this order, the Hodlnaut Group will have no assets left to effect its business recovery plan under judicial management, or even pay its users should the company be liquidated," the company said in a statement.
On July 27, Hodlnaut applied to the Singapore High Court for permission to file an application for a judicial review of SPF's order in a bid to throw it out.
Hodlnaut said last Friday that there are "pending proceedings" between the company and the Singapore authorities, without revealing more. It clarified yesterday that the matter involves the SPF transfer order.
Separately, Hodlnaut's earlier application for interim judicial management has hit a snag.
This comes after the judicial managers for Samtrade Custodian and S.A.M. Fintech disagreed with Hodlnaut's proposed candidate for interim judicial manager.
Previously, the crypto lender had applied for Kairos Corporate Advisory's Mr Tam Chee Chong to be its interim judicial manager and, subsequently, judicial manager.
But judicial managers of Samtrade Custodian and S.A.M. Fintech are proposing to appoint three judicial managers from American accounting and advisory firm Grant Thornton. They are Mr Rajagopalan Seshadri, Mr Paresh Jotangia and Ms Ho May Kee.
This was "based on what they feel is most beneficial for the S.A.M. Trade Online Trading Business' 120,000 creditors", Hodlnaut said.
The interim judicial management application will be next heard on Friday, with Hodlnaut likely to update users next Monday.
The lender's judicial management application will be next heard on Aug 30.
In previous updates to users, Hodlnaut said it has laid off about 40 people, or 80 per cent of staff.
It also said that if the company is liquidated, all its assets will be sold before being distributed to users in proportion to their holdings.
Hodlnaut is one of many crypto companies battered by the crypto market rout that was triggered by the collapse of stablecoin TerraUSD and its sister token Luna. Others, like brokerage Voyager Digital and exchange Zipmex, have also filed for bankruptcy protection.