Hodlnaut is reportedly facing a police probe over alleged offenses of cheating and fraud.
According to reports the police’s commercial affairs department has launched an investigation into the founders of the exchange based on multiple complaints against the platform between August and November 2022.
The Singapore police noted that the majority of complaints revolve around false representations and misinformation regarding the company’s exposure to a certain digital token. Police also advised investors impacted by the Hodlnaut crisis to file a complaint online and submit verifiable documents of their transaction histories on the platform.
The first signs of trouble for the crypto lender came when it suspended withdrawals on the platform, citing a liquidity crisis. The suspension of withdrawals came just months after the infamous crypto contagion in the second quarter led by the implosion of the Terra ecosystem.
At the time, the platform claimed they had no exposure to the now-defunct algorithmic Terra stablecoin now called TerraUSD Classic. However, on-chain data contradicted crypto lenders’ claims and suggested they held at least $150 million in USTC.
The on-chain data was later confirmed by a judicial report in October. The report noted that the crypto lender lost nearly $190 million to the Terra collapse and later deleted thousands of documents related to their investments in order to hide their exposure.
