Singapore police investigate Hodlnaut for possible fraud, cheating

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

Fast facts

  • 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