Hodlnaut reportedly lied about its exposure to the now-defunct Terra algorithmic stablecoin and lost with regards to $190 million.
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Singapore-basically based crypto lender Hodlnaut is reportedly facing a police probe over alleged offenses of cheating and fraud.
According to stories revealed in local media, the police’s industrial affairs department has launched an investigation into the founders of the change in response to a pair of complaints in opposition to the platform between August and November 2022.
The Singapore police eminent that the bulk of complaints revolve around untrue representations and misinformation relating to the firm’s exposure to a sure digital token. Police additionally urged merchants impacted by the Hodlnaut crisis to file a criticism on-line and submit verifiable paperwork of their transaction histories on the platform.
Neither the Singapore police nor Hodlnaut straight away replied to Cointelegraph’s requests for commentary.
The first indicators of anguish for the crypto lender came on Aug. 8 when it suspended withdrawals on the platform, citing a liquidity crisis. The suspension of withdrawals came upright months after the spoiled crypto contagion in the second quarter led by the implosion of the Terra ecosystem.
On the time, the platform claimed they’d no exposure to the now-defunct algorithmic Terra stablecoin now referred to as TerraUSD Traditional (USTC). On the alternative hand, on-chain data contradicted crypto lenders’ claims and suggested they held as a minimum $150 million in USTC.
The on-chain data modified into as soon as later confirmed by a judicial report in October. The report eminent that the crypto lender lost with regards to $190 million to the Terra crumple and later deleted thousands of paperwork linked to their investments in divulge to camouflage their exposure.
Hodlnaut managed to defend its USTC exposure below wraps for practically three months after the crumple of the Terra ecosystem however in the end fell prey to the liquidity crunch forcing it to search out judicial management below which a courtroom appointed a singular interval in-between CEO for the company. Three months down the line, its directors are now facing a police probe for keeping customers at the nighttimes.
In August, the crypto lender had said it modified into as soon as engaged on a restructuring notion with hopes of resuming operations quickly.