Singapore Police Probe Hodlnaut for ‘Doable Dishonest and Fraud’

 Singapore Police Probe Hodlnaut for ‘Doable Dishonest and Fraud’

Singapore’s white-collar crime investigation unit, the Industrial Affairs Division (CAD), on Wednesday, launched a probe into troubled crypto lender Hodlnaut for “attainable dishonest and fraud,” based on an official statement

Between August and November, the police acquired “a number of reviews” that Hodlnaut and its administrators had made “false representations” in regards to the lender’s publicity to “a sure digital token.” 

The unnamed token doubtless refers to Terra’s now-collapsed USTC, previously often called UST, an algorithmic dollar-pegged stablecoin that quickly depegged again in Might. Decrypt reached out to Singapore’s CAD and Hodlnaut to substantiate this, however didn’t obtain an instantaneous reply. 

The Terra ecosystem’s historic collapse bankrupted a number of crypto lenders—together with Celsius, Voyager, and Vauld—and resulted in Hodlnaut’s present liquidity troubles. 

Hodlnaut on the brink

Hodlnaut seems to have been badly affected by the contagion of the Terra disaster. 

On August 8, the corporate froze withdrawals, deposits, and token swaps to “give [it] the time to work intently with [its] authorized advisors to give you the absolute best restructuring and restoration plan for [its] customers.”

Hodlnaut filed for interim judicial administration on August 13 to achieve momentary safety from any authorized claims. The method additionally covers the beleaguered lender from having to promote any of its Bitcoin and Ethereum holdings at a loss. 

Later that month, the corporate reduce 80% of its employees to lower your expenses.

By August 30, Hodlnaut had been granted judicial administration by the Singapore Excessive Courts. 

Interim managers Ee Meng Yen Angela and Aaron Loh Cheng Lee from EY Company Advisors Pte. had been appointed as the corporate’s interim judicial managers (IJMs), though founder Simon Lee petitioned the Excessive Court docket to take away EY from the restructuring course of, accusing the consulting firm of dishonesty.

The IJMs printed a report on the finish of October revealing Hodlnaut misplaced round $189.7 million from the Terra crash. It additionally stated that Hodlnaut’s administrators “downplayed the extent of the group’s publicity to Terra/Luna each in the course of the interval main as much as and following the Terra/Luna collapse in Might 2022.” 

A brand new report by the interim managers has added much more gasoline to the flames.

Almost 72% ($13.4 million) of the belongings the lender held on centralized exchanges had been deposited within the now-bankrupt FTX, the trade’s different historic disaster this 12 months.

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