According to a Nov. 23 statement on the Singapore police website, the white-collar crime unit is investigating Hodlnaut, a local cryptocurrency lender under court protection from creditors, on allegations of fraud.
Between August and this month, the police Commercial Affairs Department, which handles white-collar crime, received multiple reports alleging Hodlnaut and/or its directors made false representations about the company’s exposure to an unspecified digital token.
According to the statement, the police have launched an investigation into Holdnaut and its directors for possible cheating and fraud offenses under Sections 417 and 424A of the Penal Code 1871.
Those who deposited digital tokens with Hodlnaut and believe they were duped by the company’s false representations can file police reports backed up by documentary evidence.
Hodlnaut halted withdrawals, token swaps, and deposits in August due to a liquidity crisis caused by the Terra-Luna stablecoin collapse.
According to Bloomberg, its Hong Kong subsidiary, Hodlnaut HK, suffered a US$190 million loss after the Terra algorithmic stablecoin’s dollar peg cracked.
In a related development, Hodlnaut’s court-appointed managers stated in a statement on November 11 that approximately 25% of the company’s assets were on centralized exchanges, with over 71% of those assets valued at S$18.47 million held with the now-defunct FTX exchange.
According to the statement, the managers attempted but failed to move the assets from FTX to other platforms.