Singapore police have announced that they are investigating crypto lender HodlNotch and its directors for fraudulent and deceptive practices.
The Singapore Police Force’s Commercial Affairs Department said it would investigate several reports received between August and November. These reports claim that HodlNotch and its directors made misleading statements about the company’s exposure to an anonymous digital token.
The police urged any other investors who believed to have been defrauded by these “false representations” to contact them. To aid the investigation, the petitioners should produce documents relating to their transactions with HodlNotch. These include records of payments in addition to relevant correspondence with HodlNot.
The investigation comes as the latest crisis to befall the beleaguered crypto lender. In August, HodlNotch announced it was suspending withdrawals, token swaps, and deposits for its customers.
In addition to “market conditions,” the collapse of Celsius Network earlier this year also motivated HodlNotch’s decision. The network’s bankruptcy papers revealed HoddleKnot as one of its institutional clients.
As a result, HodlNotch withdrew its application to the Monetary Authority of Singapore (MAS) to offer regulated digital payment token (DPT) services. HodlNotch was placed under judicial management by the Singapore High Court at the request of the crypto lender.
Similar to bankruptcy, judicial management enables companies to avoid forced liquidation of their assets and stabilize their financial condition. The court appointed HodlNot interim judicial administrators and ordered a stay of creditor proceedings against the crypto lender.
Last month, a court report revealed that company directors withheld important documents from interim judicial managers. These directors were allegedly non-cooperative with the internal judicial managers and denied them access to several documents and records.
Singapore and FTX
According to a recent circular from HodlNotch’s interim judicial manager, about 25% of its assets were held on centralized exchanges. It detailed that 71.8% of these were held on FTX, with an estimated value of S$18.47 million. Interim judicial administrators were not successful, despite efforts to retrieve the assets prior to the collapse of the exchange.
MAS recently released a statement regarding its outlook towards FTX in light of its collapse. While it warned users about the risks of investing with unregistered entities, it did not deter them from doing so.
It responded to an inquiry about keeping rival exchange Binance on its investor alert list, but not FTX. MAS said this was done because Binance was actively seeking users in Singapore, while FTX was not.
Meanwhile, Singapore state holding company Temasek recently wrote off its entire investment in FTX. With $275 million invested, Temasek lost the most among other creditors, including SoftBank and Sequoia Capita.
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