Singapore police allegedly investigate Hodlnaut

It has been claimed that the authorities in Singapore are looking into allegations of cheating and fraud involving the cryptocurrency lender Hodlnaut.

There were multiple complaints lodged against the platform between the months of August and November 2022, according to reports that were published in the local media. As a result of these complaints, the commercial affairs department of the police department has opened an investigation into the founders of the exchange.

The bulk of complaints, according to the Singapore authorities, focus on deceptive claims and misinformation about the company's exposure to a particular digital token.

Investors who were adversely affected by the Hodlnaut problem were also instructed by the police to register a complaint online and present verified evidence of their transaction histories on the site.

The cryptocurrency lending platform showed the first symptoms of difficulty on August 8, when it temporarily halted withdrawals on the site, claiming a liquidity shortage as the reason.

At the time, the platform said that they had no exposure to the algorithmic Terra stablecoin, which has since been discontinued and is now known as TerraUSD Classic (USTC).

On-chain data, however, contradicted the assertions made by crypto lenders and revealed that they possessed at least $150 million dollars worth of USTC.

In October, a court report provided more evidence that the data stored on the chain were accurate.

According to the article, the cryptocurrency lender suffered a loss of around $190 million as a result of Terra's collapse. Subsequently, in order to conceal their level of risk, they destroyed thousands of papers linked to their investments.

After the collapse of the Terra ecosystem, Hodlnaut was able to keep its exposure to USTC a secret for almost three months. However, it eventually fell victim to the liquidity crunch, which forced the company to seek judicial management, during which a court appointed a new interim CEO for the company.

After a delay of three months, the directors of the company are now the subject of an investigation by the police for failing to keep the users informed.

In August, the cryptocurrency lender said that it was working on a strategy to restructure in the hopes that it would soon be able to resume operations.