Hodlnaut is Reportedly the Subject of a Police Investigation in Singapore

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Last Updated on November 24, 2022 by Bitfinsider

Hodlnaut, a cryptocurrency lender based in Singapore, is apparently the subject of a police investigation into allegations of cheating and fraud.

According to local media sources, the commercial affairs division of the police has initiated an investigation into the exchange’s founders after receiving many complaints against the platform between August and November 2022.

The bulk of complaints about the company’s exposure to a particular digital token, according to the Singapore police, involve deceptive statements and misinformation. Police also asked investors affected by the Hodlnaut problem to file a complaint online and submit verified records of their platform transactions.

On August 8, the crypto lender froze withdrawals on its site, citing a liquidity problem as the first symptom of instability. The ban of withdrawals occurred only a few months after the infamous crypto pandemic in the second quarter, which precipitated the collapse of the Terra ecosystem.

At the time, the site asserted it had no exposure to the defunct algorithmic Terra stablecoin, which is now known as TerraUSD Classic (USTC). However, on-chain data contradicted the statements of crypto lenders and indicated that they possessed at least $150 million in USTC.

In October, a judicial report affirmed the blockchain-based data. According to the study, the crypto lender lost roughly $190 million due to the Terra collapse and then destroyed thousands of investment-related papers to conceal their exposure.

Hodlnaut was able to conceal its USTC exposure for over three months after the collapse of the Terra ecosystem, but eventually succumbed to the liquidity constraint, which forced the company to seek judicial administration and install a new temporary CEO. Three months later, its directors are now facing a police investigation for withholding information from users.

In August, the cryptocurrency lender announced that it was working on a reorganization plan and hoped to resume operations soon.

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