Singapore police investigate potential fraud at Hodlnaut

Category: Asia Crypto Regulatory
Posted by AIBC Group

Singapore’s Commercial Affairs Department said it’s investigating Hodlnaut Pte. and its directors for possible cheating and fraud.

Between August and November of this year, police received multiple reports claiming that Hodlnaut and its directors had made false representations regarding its exposure to a certain digital token.

In an advisory, the department urged the public to lodge a police report, or file a statement online, if they believe they have been defrauded by Hodlnaut.

The Singapore crypto exchange is under the control of judicial managers, who were appointed in September after the company halted all deposits and withdrawals in August. 

Hodlnaut directors reportedly downplayed the exchange’s exposure to Terra and Luna coins, which collapsed earlier this year. According to a report by Bloomberg, citing a judicial manager report, the company lost almost $190 million from the crash. 

South Korean prosecutors have asked Interpol for its help in tracking down Do Kwon, the executive behind the coins. 

News that Singapore is investigating Hodlnaut comes just weeks after the collapse of crypto exchange FTX, with billions in funds missing. The demise of the exchange, led by Samuel Bankman Fried was another blow to confidence in the industry.

It has also had wide-reaching fallout, with other crypto exchanges said to be faltering. Earlier this week, Genesis was forced to deny rumours that it is preparing to file for bankruptcy “imminently” if it is unable to meet a $1 billion shortfall brought on by the FTX collapse. The cryptocurrency investment bank is reportedly trying to raise at least $1 billion in additional capital.

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