July 21, 2024


A Singapore court report has disclosed that bankrupt crypto lender Hodlnaut has been hiding some documents from the court-appointed Interim Judicial Managers (IJMs).

The IJMs at EY Corporate Advisors filed the report, asking the Singapore High Court to compel Hodlnaut founders Zhu Juntao and Simon Lee to present the hidden documents, TechinAsia reported.

According to the report: “The IJMs have encountered significant difficulties in piecing together an accurate and complete picture of the company’s financial position. Among other reasons, the company’s accounting and financial records have not been properly maintained prior to the IJMs appointment.”

Hodlnaut Founders Reportedly Uncooperative

The IJM accused the Hodlnaut founders Zhu Juntao and Simon Lee and some unnamed employees of being uncooperative. Reportedly, they are obstructing judicial managers from accessing and controlling several vital documents and records.

These include over 1,000 files deleted from the Google Workspace since the IJMs were appointed.

The documents would have helped the IJMs to understand the financial position of crypto lender Hodlnaut better. There’s also a problem of improper maintenance of accounting and financial records even before the IJM appointments.

So far, the court-appointed managers are yet to get accurate information on the crypto lender DeFi positions. The DeFi assets account for most of the Hodlnaut crypto assets and are on several platforms. These include Compound, Aave, Curve, and Convex.

The lender assets on centralized exchanges only account for $25.7 million of the estimated $104 million it has. This is far lower than the total liabilities, which stand at $377 million.

Simon Lee Accuses Judicial Managers of Dishonesty

The report comes a week after Hodlnaut co-founder Simon Lee filed an affidavit against the IJM accusing them of dishonesty. According to Lee, the IJMs had sacked the embattled firm’s former lawyer despite assurances that they would be retained.

Simon Lee said that there is a possible case of conflict of interest in the new hire. WongPartnership could be swayed by one of its largest creditors the Algorand Foundation. WongPartnership has reportedly acknowledged that it represents Algorand Foundation.

With the IJMs not having access to complete information, they can’t decide whether the Hodlnaut can continue or be liquidated. However, liquidation is looking more likely given that only three employees remain out of 38 that were there before August.

The report also hinted at the possibility of criminal charges against the founder. Mainly as it emerged that the directors told some employees to withdraw their funds before announcing they were halting withdrawals.

Hodlnaut is one of the corporate victims of the Terra LUNA UST crash. After disclosing its losses in August, the Monetary Authority of Singapore withdrew the in-principle license that allows the Hodlnaut to offer crypto-lending service.


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