It has been claimed that Singaporean authorities are investigating allegations of cheating and fraud involving cryptocurrency lender Hodlnaut.
Multiple complaints were filed against the platform between the months of August and November 2022, according to reports published in local media. As a result of these allegations, the commercial affairs department of the police department opened an investigation into the founders of the exchange.
Most of the complaints, according to the Singaporean authorities, center around misleading claims and misinformation about the company’s exposure to a particular digital token.
The police also instructed investors who were adversely affected by the Hodlnaut issue to register a complaint online and submit verified evidence of their transaction histories on the site.
The cryptocurrency lending platform showed the first signs of trouble on August 8, when it temporarily halted withdrawals on the site, citing a liquidity shortage as the reason.
At the time, the platform said they had no exposure to the Terra algorithmic stablecoin, which has since been discontinued and is now known as TerraUSD Classic (USTC).
However, the on-chain data contradicted the claims made by the cryptocurrency lenders and revealed that they held at least $150 million worth of USTC.
In October, a court report provided further evidence that the data stored on the chain was accurate.
According to the article, the cryptocurrency lender suffered a loss of around $190 million as a result of the Terra collapse. Subsequently, to hide 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 his USTC exposure secret for almost three months. However, he ultimately fell victim to the liquidity crisis, which forced the company to seek court proceedings, during which a court appointed a new interim CEO for the company.
After a three-month delay, company managers are now under investigation by the police for failing to keep users informed.
In August, the cryptocurrency lender said it was working on a restructuring strategy in the hope that it could resume operations soon.