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Law enforcement agents in Singapore have reportedly opened an investigation against the troubled crypto lender Hodlnaut.Â
The police suspect the companyâs executives might have cheated users over the years and committed other crimes.
Hodlnaut Takes Another Punch
According to a Bloomberg coverage, Singaporeâs police force started probing Hodlnaut for its alleged involvement in cheating and fraud offenses. This comes as a result of numerous reports which blamed the firmâs directors for having made âfalse representations relating to the companyâs exposure to a certain digital token.â
âIf you have deposited digital tokens with Hodlnaut and believe that you may have been defrauded through, among others, false representations made by Hodlnaut, you may wish to lodge a police report at the nearest Neighbourhood Police Centre or online,â the police outlined.
The Singaporean-based cryptocurrency lender halted withdrawals, deposits, and token swaps in August, citing âdifficult market conditions.â It dismissed approximately 80% of its workforce and reduced its interest rates nearly a week after suspending services.
Hodlnaut filed to be placed under judicial management with the Singapore High Court, hoping it could ârehabilitateâ its business and prevent a forced liquidation of its assets:
âThe judicial management application provides a moratorium (or temporary pause) against legal claims and proceedings against Hodlnaut. This pause will provide us with the breathing space to focus our efforts on the recovery plan to rehabilitate the company.â
The authorities approved the request and appointed Rajagopalan Seshadri, Paresh Jotangia, and Ho May Kee as the firmâs interim judicial managers.
The Exposure to Terraâs UST
As CryptoPotato recently reported, Hodlnaut was among the victims of the colossal Terra crash in May this year. The company lost $190 million due to its exposure to the algorithmic stablecoin UST.Â
âIt appears that the directors had downplayed the extent of the groupâs exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022.â
The crypto lender appears to have been hiding the facts from its users. Bloombergâs data revealed that some of the companyâs employees deleted over 1,000 âkeyâ documents that could have shown the exposure.
Terraâs native token â LUNA â and its stablecoin â UST â plunged to virtually zero causing huge panic among investors and distress in the entire market. Multiple sources disclosed that some people had even committed suicide due to their multi-million losses.
The post Crypto Lender Hodlnaut Investigated by Singaporean Authorities (Report) appeared first on CryptoPotato.
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