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Singapore’s Police Probes Hodlnaut for Suspected Fraud

Cointime Staff· 2 min read

Troubled crypto lender Hodlnaut is now faced with a probe from Singaporean authorities over possible fraud and cheating offences.

Beleaguered crypto lender Hodlnaut is currently facing a police probe in Singapore. On Wednesday, the law enforcement authorities in Singapore launched an investigation into the company, including the directors, over suspected cases of cheating and fraud offences, according to a report by Bloomberg.

Hodlnuat Accused of Misrepresenting Company’s Exposure to Certain Token

The police said it received multiple complaints between August and November this year, alleging that either Hodlnaut or its directors made ‘false representations relating to the company’s exposure to a certain digital token’ — speculated to be the digital tokens from Terra ecosystem.

Recall that the Singaporean lender Hodlnaut was one of the companies hit during the first wave of the crypto liquidity crunch spurred by the collapse of the Terra ecosystem and assets in May. Months later, the crypto lender abruptly suspended customer withdrawal, blaming market conditions at the time.

Hodlnaut had claimed that its exposure to Terra was not significant. However, subsequent findings from the Interim Judicial Managers (IJM) assigned to the company showed that the firm incurred about $190 million loss from Terra’s implosion.

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

Hodlnaut Suffer Another Loss With FTX

As recently as November 11th, the Judicial Managers revealed in another court filing that 25% of Hodlnaut’s assets were held in centralised exchanges. About 75% of these assets were held on the now-bankrupt FTX exchange, with an estimated value of S$18.47 million (or USD$13.3 million)

In the wake of FTX troubles, the Judicial Managers said they tried moving the funds to another centralised exchange before FTX suspended withdrawals but did not receive any response from the exchange. “In the circumstances, the extent of the Company’s recovery of the Digital Assets held with FTX is currently uncertain,” said the IJM.

(By Ibiam Wayas)

# Crypto

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