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Police investigating Singapore-based crypto lender Hodlnaut for suspected cheating, fraud offences

Police investigating Singapore-based crypto lender Hodlnaut for suspected cheating, fraud offences

An illustration picture showing gold-plated souvenir cryptocurrency Tether, Bitcoin and Etherium coins arranged beside a screen displaying a trading chart on May 8, 2022. (File photo: AFP/Justin Tallis)

SINGAPORE: The police are investigating Singapore-based crypto lender Hodlnaut and its directors for suspected cheating and fraud offences.

Between August and November this year, the police received multiple reports alleging that Hodlnaut or its directors had made false representations relating to the company's exposure to a certain digital token.

The Commercial Affairs Department launched an investigation into the crypto lender for the suspected offences.

"If you have deposited digital tokens with Hodlnaut and believe that you may have been defrauded through, among others, false representations made by Hodlnaut, you may wish to lodge a police report at the nearest Neighbourhood Police Centre, or online," said the police.

"To assist us in the review of your complaint, please provide documents relating to your transactions with Hodlnaut. Such documents include the records of the payments made to and received from Hodlnaut as well as relevant correspondence with Hodlnaut."

In a circular on Nov 11 from EY - Hodlnaut's interim judicial managers - it said that prior to EY's appointment, about 25 per cent of Hodlnaut's assets were deployed on centralised exchanges.

About 71.8 per cent of these digital assets deployed by Hodlnaut on centralised exchanges were held with FTX, with an estimated market value of S$18.47 million.

Before the announcement of FTX's collapse, the interim judicial managers attempted to withdraw the assets from FTX but it could not be processed. When EY contacted FTX several times to escalate the matter, no responsed was received except for an automated reply.

In August, Hodlnaut suspended withdrawals, swaps and deposits. It said it would withdraw its application for a licence from the Monetary Authority of Singapore (MAS) to provide digital token payment services, for which it received in principle approval in March.

Later that month, it laid off about 40 employees and disclosed that it was being investigated by Singapore police. Hodlnaut said at the time that the layoffs were to reduce the company's expenditure.

Source: CNA/fh


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