The founder of troubled cryptocurrency lender Hodlnaut is trying to save the business despite creditors insisting on liquidation.
On February 28, Hodlnaut interim court managers released the sixth affidavit of Hodlnaut co-founder Simon Lee reportedly stated that the founder of the company proposed selling the business as a better option for creditors than liquidating the firm.
According to a report by Bloomberg, Lee said that he and fellow Hodlnaut co-founder Zhu Juntao have reached out to several “potential white knight investors.”
Lee reportedly wrote that Hodlnaut’s founders believed the company’s user base “could be purchased and deployed on digital asset platforms owned or associated with these investors.” He stated that the business transaction would “maximize” value for creditors.
The affidavit further reiterated Hodlnaut’s desire to sell the company as the company is working with several potential investors to sell its business and other assets. Some potential buyers are reportedly questioning the purchase of Hodlnaut and their claims against the collapsed crypto exchange FTX since early February.
The news comes shortly after Hodlnaut’s main creditors, including the Algorand Foundation, in January rejected the offer of a restructuring plan that would have allowed the current directors to oversee the company’s operations during the restructuring phase. Creditors contend that restructuring will not help and that it is in their best interest to liquidate the company’s remaining assets.
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As of December 2022, Hodlnaut Group owes a total of $160.3 million – or 62% of its outstanding debt – to companies and entities like Algorand, Samtrade Custodian, SAM Fintech and Jean-Marc Tremeaux.
Once the leading crypto lending platform, Hodlnaut was forced to suspend its services in August 2022 due to a lack of liquidity triggered by the bear market in 2022. Hodlnaut’s operations were further hampered by the company’s significant exposure to the collapsed FTX exchange, with the company owning more than 500 Bitcoins (BTC) stuck on the Sam Bankman-Fried crypto exchange.
The news comes amid another troubled crypto lender, Voyager, announcing on February 28 that its customers have opted into a restructuring plan with Binance’s United States business, Binance.US. In December, Binance.US announced an agreement to buy Voyager assets for $1.02 billion.