Singapore-based crypto lender HodlKnot is reportedly going through a police investigation over alleged offenses of fraud and dishonest.
In keeping with stories printed in native media, the Business Affairs Division of the police has launched an investigation into the founders of the trade primarily based on a number of complaints in opposition to the platform between August and November 2022.
The Singapore police famous that the majority complaints revolved round false representations and misinformation concerning the firm’s publicity to a sure digital token. The police additionally suggested buyers affected by the HodlNotch disaster to file complaints on-line and submit verifiable paperwork of their transaction historical past on the platform.
Neither the Singapore Police nor HodlNot instantly responded to Cointelegraph’s requests for remark.
The primary signal of bother for the crypto lender got here on August 8 when it suspended withdrawals on the platform, citing a liquidity disaster. The suspension of withdrawals got here a couple of months after the notorious crypto transition within the second quarter as a result of implode of the Terra ecosystem.
On the time, the platform claimed that they’d no publicity to the now defunct algorithmic Terra stablecoin now referred to as TerraUSD Traditional (USTC). Nevertheless, on-chain knowledge contradicted the crypto lender’s claims and prompt they held at the very least $150 million in USTC.
The on-chain knowledge was later confirmed by a judicial report in October. The report states that the crypto lender misplaced roughly $190 million due to the Terra collapse and subsequently deleted 1000’s of paperwork associated to its investments to cover its publicity.
Associated: Crypto Lender HodlKnot Seeks Judicial Administration to Keep away from Pressured Liquidation
HodlNotch managed to maintain its USTC publicity secret for about three months following the collapse of the Terra ecosystem, however finally fell sufferer to an absence of liquidity, which led it to hunt judicial administration, whereby a courtroom granted a settlement to the agency. Appointed new interim CEO. Three months later, its administrators are actually going through a police investigation for preserving customers at the hours of darkness.
In August, the crypto lender had stated that it’s engaged on a restructuring plan with hopes of resuming operations quickly.