The interim judicial managers overseeing the collapsed cryptocurrency lender Hodlnaut have reportedly rejected a latest buyout deal due to the plummeting value of the settlement token. Administrators of Hodlnaut declined the takeover terms proposed by cryptocurrency exchange OPNX, which was established by Kyle Davies and Su Zhu, the co-founders of failed hedge fund Three Arrows Capital (3AC). In a court filing, the interim managers argued that the offer of $30 million worth of Flex (FLEX) tokens was “illiquid” and possessed “speculative value,” according to Bloomberg.
Moreover, a majority of Hodlnaut Group’s creditors, representing 60% of the total debt, also opposed the OPNX deal. They shared concerns regarding the declining value of FLEX, which has lost roughly 90% of its worth since OPNX made its initial offer to take over 75% of Hodlnaut in August 2023. At the time of the proposal, FLEX traded at around $7. However, according to CoinGecko, the Flex Coin is currently trading at $0.58.
The interim managers of Hodlnaut were not solely concerned with the value of FLEX. They also expressed worries about the absence of cash injection or similarly liquid assets, such as Bitcoin (BTC) or Ether (ETH). Additionally, they were unsatisfied with OPNX’s failure to provide a timeline for repayment of creditors’ debt and the lack of details regarding payment beyond 30% of liabilities.
It is worth noting that FLEX is the native token of the Coinflex exchange, which is closely connected to the OPNX platform. The founders of Coinflex, Mark Lamb and Sudhu Arumugam, also participated in the launch of OPNX. However, Coinflex suspended all withdrawals in June 2022 due to extreme market conditions and uncertainty surrounding a counterparty. The exchange subsequently filed for restructuring in a Seychelles court as it aims to recover $84 million in losses from a large individual customer. Coinflex plans to officially cease operations on October 31, 2023, and has advised its customers to withdraw all funds from the platform by the shutdown date.
The rejection of this buyout deal by the interim judicial managers of Hodlnaut underscores their concerns regarding the viability and liquidity of the proposed offer. With the Flex Coin’s value experiencing a significant decline and uncertainty surrounding the repayment of creditors’ debt, it is evident that the managers are prioritizing the interests and stability of Hodlnaut Group.
As the situation continues to unfold, it remains uncertain what the future holds for Hodlnaut and its creditors. The rejection of the OPNX deal highlights the complexities and challenges faced in the aftermath of the collapse of a cryptocurrency lender.
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