Hodlnaut, a Singapore-based crypto lender, which is currently under interim judicial management, is being investigated by the Commercial Affairs Department, the white-collar crime unit of the Singapore police, according to information released on Nov. 23.
See related article: Singapore’s central bank says not possible to protect local users from FTX fallout
Police say they received multiple reports between August and this month alleging Hodlnaut and/or its directors had made false representations relating to the company’s exposure to an unspecified digital token.
Police launched an investigation into Holdnaut and its directors for possible cheating and fraud offenses under Sections 417 and 424A of Penal Code 1871.
Those who deposited digital tokens with Hodlnaut and believe they may have been defrauded through false representations made by the company can file police reports supported by documentary evidence.
Hodlnaut halted withdrawals, token swaps and deposits in August as it battled a liquidity crunch due to market conditions in the aftermath of the Terra-Luna collapse. Its Hong Kong subsidiary, Hodlnaut HK, suffered a US$190 million loss after the algorithmic stablecoin’s dollar peg cracked, according to Bloomberg.
In an unrelated development, the company’s interim Judicial Managers (IJM) revealed on Nov. 11 that about 25% of the company’s assets were on centralized exchanges and over 71% of those assets worth S$18.47 million were held with now-bankrupt crypto exchange FTX. IJMs reportedly tried to move the assets from FTX to other centralized exchanges as the Sam Bankman-Fried-backed exchange crumbled but were unsuccessful in doing so.
See related article: Hodlnaut owes US$200 mln debt to 17,000 creditors: report