Cryptolender Hodlnaut Investigated by Singaporean Authorities (Report)

Cryptolender Hodlnaut Investigated by Singaporean Authorities (Report)

Law enforcement agents in Singapore have reportedly opened an investigation into troubled crypto lender Hodlnaut.

The police suspect that the company’s managers may have cheated users over the years and committed other crimes.

Hodlnaut takes another hit

According to a Bloomberg coverage, Singapore’s police force began investigating Hodlnaut for its alleged involvement in cheating and fraud. This comes as a result of a series of reports that accused the firm’s directors of making “false representations related to the company’s exposure to a particular digital token.”

“If you have deposited digital tokens with Hodlnaut and believe you may have been defrauded through, among other things, false representations by Hodlnaut, you may want to file a police report at your nearest neighborhood police center or online,” police said.

The Singapore-based cryptocurrency lender stopped withdrawals, deposits and token swaps in August, citing “difficult market conditions.” It dismissed about. 80% of the workforce and reduced rates almost a week after services were suspended.

Hodlnaut archived to be placed under judicial management with the Singapore High Court, in the hope that it could “rehabilitate” the business and prevent a compulsory liquidation of its assets:

“The legal management application provides a moratorium (or temporary pause) against legal claims and proceedings against Hodlnaut. This pause will give us breathing room to focus our efforts on the recovery plan to rehabilitate the company.”

The authorities approved the request and appointed Rajagopalan Seshadri, Paresh Jotangia and Ho May Kee as the firm’s interim legal directors.

The exposure to Terra’s UST

As The crypto potato recently reported, Hodlnaut was among the victims of the colossal Terra crash in May of this year. The company lost $190 million due to its exposure to the algorithmic stablecoin UST.

“It appears that the directors had downplayed the extent of the group’s exposure to Terra/Luna both in the period leading up to and following the May 2022 Terra/Luna collapse.”

The crypto lender seems to have hidden the facts from users. Bloomberg’s data revealed that some of the company’s employees deleted over 1,000 “key” documents that could have shown the exposure.

Terra’s original token – LUNA – and its stablecoin – UST – plummeted to virtually zero, causing massive panic among investors and distress throughout the market. Several sources revealed that some people had even committed suicide due to the loss of millions.

SPECIAL OFFER (sponsored)

Binance Free $100 (Exclusive): Use this link to sign up and receive $100 free and 10% off Binance Futures first month (terms).

PrimeXBT Special Offer: Use this link to sign up and enter code POTATO50 to receive up to $7,000 on your deposits.

Leave a Reply

Your email address will not be published. Required fields are marked *