Loh Cheng Lee Aaron v Hodlnaut Pte Ltd: Liquidator's Authority & Digital Asset Ownership in Cryptocurrency Winding Up
In the case of *Loh Cheng Lee Aaron and another v Hodlnaut Pte Ltd (in compulsory liquidation)*, the General Division of the High Court of Singapore granted the liquidators' application for authorisation under s 144(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 to commence an originating application for directions under s 145(3) of the IRDA. The directions sought pertain to determining which digital assets within the Hodlnaut Group belong to Hodlnaut Pte Ltd and which users constitute creditors of the company. The court, presided over by Judge Aidan Xu @ Aedit Abdullah J, found that the authorisation was necessary for the proper winding up of the company.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Authorisation granted as prayed for.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court authorizes Hodlnaut Pte Ltd's liquidators to seek directions on digital asset ownership and creditor identification during winding up.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Aaron Loh Cheng Lee | Claimant | Individual | Authorisation granted | Won | |
| Ee Meng Yen Angela | Claimant | Individual | Authorisation granted | Won | |
| Hodlnaut Pte Ltd (in compulsory liquidation) | Defendant | Corporation | Authorisation granted | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aidan Xu @ Aedit Abdullah J | Judge of the High Court | Yes |
4. Counsels
4. Facts
- Hodlnaut Pte Ltd is a Singapore-incorporated company providing a cryptocurrency trading platform.
- Hodlnaut Trading Limited (Hodlnaut HK) is a wholly-owned subsidiary of Hodlnaut Pte Ltd.
- The Company was placed under interim judicial management pending the hearing of the judicial management application.
- The court granted a winding up order against the Company on 10 November 2023.
- The liquidators applied for authorisation to seek directions on the digital assets and creditors of the Company.
- The directors alleged that digital assets on Centralised Exchanges belonged to the Company, while those on DeFi Protocols belonged to Hodlnaut HK.
- The liquidators concluded that all digital assets belonged to the Company and all users were creditors of the Company.
5. Formal Citations
- Loh Cheng Lee Aaron and another v Hodlnaut Pte Ltd (in compulsory liquidation), Companies Winding Up No 94 of 2023 (Summons No 1917 of 2024), [2024] SGHC 257
6. Timeline
| Date | Event |
|---|---|
| Interim judicial managers applied to wind up the Company | |
| Court granted a winding up order against the Company | |
| Hodlnaut HK's liquidators sent a letter to the Company's liquidators | |
| Written Submissions of the Joint and Several Liquidators of Hodlnaut Pte Ltd | |
| Hearing | |
| Judgment issued |
7. Legal Issues
- Liquidator's Authority to Commence Legal Proceedings
- Outcome: The court held that s 144(1)(e) of the IRDA may be relied upon for authorisation to bring legal action on behalf of the Company, even with legal representation.
- Category: Procedural
- Sub-Issues:
- Scope of s 144(1)(e) of the IRDA
- Authorisation for bringing legal action on behalf of the company
- Determination of Company Assets and Creditors in Winding Up
- Outcome: The court authorized the liquidators to seek directions on which digital assets belong to the Company and which users constitute creditors of the Company.
- Category: Substantive
- Sub-Issues:
- Identification of digital assets belonging to the company
- Identification of creditors of the company
8. Remedies Sought
- Authorisation to seek directions from the court
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Insolvency
- Liquidation
11. Industries
- Financial Services
- Cryptocurrency
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Kirkham International Pte Ltd (in compulsory liquidation) | High Court | Yes | [2023] 5 SLR 635 | Singapore | Cited for the principles in relation to s 144(1)(e) and s 144(1)(f) of the IRDA and the factors the court considers when granting authorisation. |
| Yap Cheng Ghee Bob (in his capacity as the joint and several interim judicial manager of Envy Asset Management Pte Ltd) and others v Envy Asset Management Pte Ltd and other matters | High Court | Yes | [2024] 4 SLR 746 | Singapore | Cited for the principle that s 145(3) was the relevant provision where the liquidator’s decision-making may be subject to criticism and was likely to be contested. |
| Re PCChip Computer Manufacturer (S) Pte Ltd (in compulsory liquidation) | High Court | Yes | [2001] 2 SLR(R) 180 | Singapore | Cited for the principle that the court can grant a substantive order under the equivalent provision of s 145(3) in the Companies Act. |
| Lavrentiadis, Lavrentios v Dextra Partners Pte Ltd (in liquidation) and another matter | High Court | Yes | [2023] 5 SLR 1288 | Singapore | Cited as a case from which factors can be gleaned in considering whether authorisation should be granted under s 144(1). |
| Re Seshadri Rajagopalan and another and another matter | High Court | Yes | [2021] 3 SLR 1344 | Singapore | Cited as a case from which factors can be gleaned in considering whether authorisation should be granted under s 144(1). |
| Re Mingda Holding Pte Ltd and another matter | High Court | Yes | [2024] SGHC 130 | Singapore | Cited to clarify that if the liquidator seeks to bring or defend an action or legal proceeding in the name and on behalf of the company with legal representation, but only obtains approval under s 144(1)(e) and not s 144(1)(f)(ii), the court does not have the power to grant a retrospective authorisation of the liquidator’s appointment of solicitors. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 144(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 144(1)(f) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 145(3) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Liquidator
- Winding up
- Digital assets
- Creditors
- Insolvency, Restructuring and Dissolution Act 2018
- Hodlnaut Pte Ltd
- Hodlnaut HK
- Authorisation
- Directions application
15.2 Keywords
- Insolvency
- Winding up
- Liquidator
- Digital assets
- Cryptocurrency
- Hodlnaut
- Singapore
- IRDA
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Insolvency Law | 95 |
| Winding Up | 95 |
| Restructuring and Dissolution | 70 |
| Corporate Law | 30 |
16. Subjects
- Insolvency
- Winding Up
- Corporate Law
- Cryptocurrency