The state of affairs in crypto is worsening with every passing day. The FTX saga shows no signs of a conclusion. Regulators, on the other hand, have been opening new investigations against companies from the space.
More legal trouble for Hodlnaut
In what is the latest development, Singapore’s police force said that it was investigating Hodlnaut and its directors for potential cheating and fraud offenses. Per Bloomberg,
“The probe began Wednesday following multiple reports alleging “false representations relating to the company’s exposure to a certain digital token,” the police said in a statement.“
It is worth recalling that Hodlnaut revealed back in August that there were “pending proceedings” between the company and Singapore police. The proceedings also involved the city-state’s attorney-general, but the company did not disclose any further information on the matter.
Notably, the Singapore-based crypto lending firm suspended withdrawals and deposits in August citing market conditions. After that, the company filed for creditor protection and a few days later, the Singapore High Court green-flagged the same.
Then, it was revealed that the crypto lender lost roughly $190 million in the Terra ecosystem collapse that unfurled earlier this year. The downfall of Terra’s tokens—the algorithmic stablecoin UST and sister token LUNA—in May triggered this year’s crypto meltdown. Directors of the lender’s Hong Kong arm said that the loss sustained by the company equated to $189.7 million.
Parallelly, the firm also reported a financial shortfall worth millions of dollars. According to an affidavit filed, the crypto lender entailed an outstanding liability of about $281 million [SGD 391 million]. This was further compared with assets of $88 million [SGD 122 million], which led to the firm enduring a shortfall of about $193 million.