Crypto lending platform Hodlnaut is under police investigation in Singapore for alleged fraud and cheating three months after freezing client withdrawals and filing for protection from creditors.
Hodlnaut and its leaders are suspected of making "false representations relating to the company’s exposure to a certain digital token," according to a police statement on Wednesday.
The beleaguered company has seen a series of liquidity crises and legal complications. Earlier in November, it turned out the Singapore-based crypto lender held assets worth $13.1 million on the collapsed FTX exchange.
Hodlnaut filed for protection against creditors in the Singapore High Court in August after having to halt withdrawals following a liquidity crisis. Hodlnaut reported $193 million financial shortfall in court following the crash of the TerraUSD stablecoin, which broke from its peg to the U.S. dollar in May.
Holdnaut was one of a several crypto firms forced to halt customer withdrawals following TerraUSD's collapse and the implosion of crypto hedge fund Three Arrows Capital earlier this year. Vauld, which is also based in Singapore, is stuck in a similar situation, as is South Asian crypto exchange Zipmex.
The investigation comes as Singapore’s financial regulator looks to tighten consumer protection rules. The Monetary Authority of Singapore proposed to "adopt a risk-focused approach” to regulating crypto activity last month.
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