The proposed capital injection would fund partial creditor recoveries and leave OPNX with a 75% stake in the troubled crypto lender.

OPNX, a digital asset and bankruptcy claims exchange founded by the founders of the now defunct hedge fund Three Arrows Capital (3AC) and restructured crypto derivatives exchange CoinFLEX, has bid to acquire bankrupt crypto lender Hodlnaut.

According to a report from Bloomberg, OPNX has offered a $30 million capital injection made up of its native exchange token FLEX, after which the exchange would own 75% of Hodlnaut.

If the creditors approve the plan, they would receive 30% of their claims paid out in FLEX and other tokens, or a pro rata payment of up to 95% of the total available corporate asset pool, depending on whichever is higher. 

Hodlnaut filed for bankruptcy protection in August 2022 after freezing user withdrawals. The firm lost close to $190 million after the implosion of the Terra ecosystem, having converted a significant amount of its crypto into UST and staking it on the Anchor Protocol. Hodlnaut was dealt another blow after FTX halted withdrawals – it held 71% of its assets on centralized exchanges, of which $13 million worth of BTC, ETH and stablecoins were on FTX.

A group of creditors rejected an initial restructuring plan, which involved pooling together company assets and issuing creditors a new token. The creditors opposing the plan were Samtrade Custodian Limited and the Algorand Foundation that held claims worth $170 million.

In March, Hodlnaut’s founders proposed selling the business instead of placing it in liquidation, as requested by the creditors. 

Incidentally, OPNX’s founders Kyle Davies and Su Zhu are still in the midst of liquidation proceedings from their previous venture 3AC, where those overseeing the proceedings are now seeking $1.3 billion from Davies and Zhu. The 3AC liquidators are looking to recover the funds that they alleged Zhu and Davies lost by taking on more leverage despite the hedge fund having suffered massive losses following Terra’s collapse.