Singapore police are investigating local cryptocurrency lending and borrowing platform, Hodlnaut, and its directors for alleged cheating and fraud.
According to the official press release of Singapore police, the investigation came following multiple reports of allegations of false representations by the troubled crypto exchange surfaced.
"Between August and November 2022, the Police received multiple reports alleging that Hodlnaut and/or its directors had made false representations relating to the company's exposure to a certain digital token. Arising from these police reports, the CAD is investigating Hodlnaut and its directors for possible cheating and fraud offenses under Sections 417 and 424A of the Penal Code 1871," the police stated.
The troubles of Hodlnaut surfaced when the platform suspended all activities, including withdrawals and deposits, in August. The step was taken after the platform reportedly lost $189.7 million due to the collapse of the Terra ecosystem.
The Singapore-based crypto company further revealed an exposure of over SGD 18.3 million ($13.3 million) earlier this month to now collapsed cryptocurrency exchange FTX.
The Singapore police are now asking Hodlnaut customers to report their deposits on the platform or any suspicious activities. "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," the press release added.
Singapore Focus on Crypto Regulations
Several cryptocurrency startups flocked to Singapore after the Chinese government's crackdown on the exchange. However, the local industry recently faced several setbacks with several local entities' collapse.
The Monetary Authority of Singapore (MAS) oversees local crypto companies and is now tightening regulations around the industry. It proposed several rules recently, mainly around the circulation of stablecoins and the restriction of retail activities. It even wants to prohibit cryptocurrency lending services to retail investors.