Crypto lender Hodlnaut is in for more trouble. The troubled cryptocurrency lender is now facing additional legal difficulties as Singapore’s police force announced that it is looking into Hodlnaut Pte and its directors for possible cheating and fraud offenses.
The investigation was started on Wednesday as a result of numerous reports alleging “false representations relating to the company’s exposure to a particular digital token,” according to a statement from the police.
The police received numerous reports between August and November of this year claiming that Hodlnaut or its directors had misrepresented the company’s exposure to a particular digital token.
The cryptocurrency lender is the subject of an investigation by the Commercial Affairs Department into alleged offenses.
“If 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,” stated the police.
Hodlnaut halted withdrawals in August
The crypto lender stopped withdrawals in August and was given protection from creditors. Its interim judicial managers, who were appointed by the court, declined to comment.
The company is one of several crypto lenders who have been adversely affected by the near-70% decline in token prices over the past year and the failure of the TerraUSD stablecoin project. There are “pending proceedings” with the police, according to prior statements by the crypto lender.
According to a report by interim judicial managers published last month, the company had minimized its exposure to the defunct Terra digital-token ecosystem. Yet the wipeout caused a loss of almost $190 million for it.
Prior to their appointment, about 25% of Hodlnaut’s assets were being used on centralized exchanges, according to a Nov. 11 circular from EY, Hodlnaut’s interim judicial managers.
Nearly 71.8% of the digital assets that Hodlnaut had used on centralized exchanges were held by FTX, with a market value of about S$18.47 million.
The interim judicial managers repeatedly tried to withdraw the assets from FTX prior to the announcement of FTX’s demise but were unsuccessful. Singapore has tightened regulations for retail cryptocurrency investment to protect people from the dangers of a volatile market.