Beleaguered crypto lender Hodlnaut faces liquidation after key lenders rejected a proposed restructuring plan, amid a probe from Singapore authorities.

The group of creditors, including the Algorand Foundation, disagreed with provisions of the plan, according to a court filing. For instance, they objected to a provision enabling Hodlnaut’s original directors to continue leading the company.

Instead, the group of creditors believes that shuttering the firms and liquidating its asserts served their interests best. Indeed, according to the filing, they requested this occurs with utmost expediency in order to maximize the prospective distribution amount.

Hodlnaut Suffers $190m Loss

Having been affected by the collapse of Celsius, in Aug. last year Hodlnaut announced that it would have to halt customer withdrawals. The firm had already suffered a near-$190 million loss from its exposure to the collapse of the Terra ecosystem.

Following its withdrawal suspension, Hodlnaut was placed under judicial management by the Singapore High Court, at the crypto lender’s request. Under the stewardship of court-appointed interim judicial managers, Hodlnaut has been able to avoid a forced liquidation of their assets. Meanwhile, an additional hearing this week rejected an application to remove Hodlnaut’s current interim judicial managers.

Hodlnaut Under Investigation

The actions that led to the necessity of judicial management naturally evoked a certain scrutiny from authorities. In November, authorities in Singapore announced the launch of a probe into Hodlnaut and its directors for fraud.

Singapore’s Commercial Affairs Department said it would investigate several reports it had received last year that claimed Hodlnaut and its directors made misleading statements. This attention from police underscores an overall hardening stance from Singapore authorities towards digital assets.

MAS Clamps Down on Retail Crypto

In another instance, the Monetary Authority of Singapore recently put forward a series of measures that would limit retail customer access to cryptocurrencies. These measures would prevent investors from borrowing to purchase digital currencies, in addition to prohibiting firms from lending or staking crypto.

The Blockchain Association of Singapore, the island nation’s largest lobbying group, protested by issuing 11 pages of feedback, speaking out. One concern is that these limitations would force interested parties to seek riskier alternatives.

Although the association agreed with certain points, such as not letting consumers borrow to buy crypto, they ultimately called the proposal “overly restrictive.”