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Hodlnaut allegedly faces police investigation in Singapore over alleged offenses of cheating and fraud

  • News
  • November 24, 2022
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According to reports published in local media, the police’s commercial affairs department has tossed an investigation into the founders of the exchange based on multiple complaints against the platform between August and November 2022. Hodlnaut allegedly lied about its exposure to the now-defunct Terra algorithmic stablecoin and lost nearly $190 million.

He is reportedly facing a police probe over alleged faults of cheating and fraud.

The Singapore police distinguished that the majority of grievances revolve around false representations and misinformation regarding the company’s exposure to a certain digital token. Police also advised investors wedged by the Hodlnaut crisis to file a complaint online and submit verifiable documents of their transaction histories on the platform.

However, neither the Singapore police nor Hodlnaut responded to Cointelegraph’s requests for comment.

The first signs of trouble for the crypto lender came on Aug. 8 when it postponed withdrawals on the platform citing liquidity. The suspension of withdrawals came just months after the disreputable crypto contagion in the second quarter led by the collapse of the Terra ecosystem.

At the time, the platform demanded they had no exposure to the now-defunct algorithmic Terra stablecoin now called TerraUSD Classic (USTC). However, on-chain data contradicted crypto lenders’ claims and suggested they held at least $150 million in USTC.

The on-chain data was later established by a legal report in October. The report noted that the crypto lender lost nearly $190 million to the Terra collapse and later deleted thousands of documents related to their investments in order to hide their exposure.

Hodlnaut managed to keep its USTC exposure under censorships for almost three months after the collapse of the Terra ecosystem but ultimately fell prey to the liquidity crux forcing it to seek judicial management under which a court appointed a new temporary CEO for the firm. Three months down the line, its directors are now facing a police probe for keeping users in the dark.

In August, the crypto lender had said it was working on a restructuring plan with hopes of restarting operations soon.


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