The police are reportedly looking into allegations of cheating and fraud by the company and its directors.

Singapore police have started an investigation into troubled crypto exchange Holdnaut, according to multiple reports.
The white collar division of the police force is looking into allegations of cheating and fraud by the company and its directors, according to reports.

The investigation report is the latest blow for the troubled Singapore-based exchange, which was one of the many crypto firms that was hit by the crypto downturn earlier this year.

Earlier this month, the exchange had revealed that it has over SGD 18.3 million ($13.3 million) worth of crypto stuck in the defunct exchange FTX, dealing a further blow to its recovery process.

Holdnaut had frozen withdrawals in August, after reportedly losing close to $189.7 million due to the collapse of the Terra ecosystem.

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Hodlnaut was placed under Interim Judicial Management after suspending withdrawals from its platform in August.

Algorand Foundation, a nonprofit body that supports the Algorand blockchain and oversees its development, declared a $35 million exposure to beleaguered crypto lender Hodlnaut.

In a statement on its website, posted over the weekend, the foundation said the funds represented less than 3% of its total assets and it did not expect any “operational or liquidity issues” to arise as a result of the exposure.

Algorand joins a small cohort of blockchain operators affected by the crypto market downturn of recent months. A CoinDesk investigation in July found the development labs behind Moonbeam and Khyber Network are owed over $27 million by now-defunct crypto fund Three Arrows.

Singapore-based Hodlnaut was one of several crypto companies that succumbed to the pressures of the downturn. It applied to be put under judicial management on Aug. 13, five days after it froze withdrawals. Judicial management is a form of debt restructuring that sees an entity manage the business, property and assets of a distressed company. During the process the company is protected from legal proceedings from third parties.

Algorand said it invests a portion of its surplus treasury capital to generate yield for Algorand ecosystem development, with a majority of the investment consisting of locked, short-term deposits that became unavailable following Hodlnaut’s suspension of withdrawals.

Algorand said it was pursuing all legal remedies to maximize asset recovery.

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The latest firm to freeze crypto withdrawals is engaged in “proceedings” with Singaporean police.

Singaporean crypto lender Hodlnaut disclosed massive layoffs and pending “police proceedings” in a Friday blog post that underscored the dire financial and legal straits faced by the latest firm to freeze crypto withdrawals.

Hodlnaut said in the blog that it fired 40 people (80% of headcount) and slashed interest rates to 0% APR in an attempt to “stabilize our liquidity” and cut costs. Its founders are “working hard on a recovery plan” and remain in Singapore.

The interest-paying crypto swap shop said it is engaged in “proceedings” with Singaporean authorities. Its blog was mum on the details but characterized the proceedings as in users’ best interest. Hodlnaut froze those users’ assets in early August; it is now seeking protection from its creditors.

Hodlnaut is one of the many crypto firms to stumble under cratering market conditions and imploding companies, alongside Three Arrows Capital, Voyager Digital and Celsius Network. In the blog post, Hodlnaut pointed the finger at “losses suffered” from TerraUSD’s crash.

A Singapore court will hear Hodlnaut’s legal protection plea on Aug. 22, 2022. The court may appoint an interim judicial manager to oversee the company’s financials in place of its current directors.

The post Crypto Lender Hodlnaut Faces Singapore Police ‘Actions’ and Staggering Job Cuts appeared first on Crypto Insider.

Hodlnaut is looking to appoint a judicial manager to avoid liquidating customer assets at a loss.

Cryptocurrency lending platform Hodlnaut has filed an application with the Singapore High Court to be put under judicial management, which is a form of creditor protection.

According to an announcement on Hodlnaut’s website, the application was filed on Aug. 13, five days after the company froze withdrawals. The application will temporarily safeguard the lender from any legal claims.

Hodlnaut is the latest in a long line of crypto companies that have been stung by the recent market downturn, Singapore-based exchange Zipmex received creditor protection on Monday, while trading firm Three Arrows Capital owes billions of dollars to creditors after imploding due to leverage in June.

Hodlnaut hopes that being put under judicial management will allow it to devise a recovery plan to avoid liquidating customer assets.

“We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies at these current depressed asset prices,” the statement read.

The entire process is expected to take a “few months” and Hodlnaut will provide a further update on Aug. 19.

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