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A Major Crypto Lending Firm Investigated by Authorities, Caution for Users

Hodlnaut, a major cryptocurrency lending firm based in Singapore is currently being investigated by the local authorities.

The Singapore police authorities have launched a probe against the firm. The reason for launching the probe is allegations against the firm of being involved in multiple offenses.

As per the local sources, the firm is facing an investigation over allegations of fraud and cheating.

Commercial Affairs is After Hodlnaut

According to the reports, it is the commercial affairs department of the Singapore police that is to thoroughly investigate the entire matter.

The investigation will extend to the founders of the exchange. The police authorities launched their investigation in response to multiple complaints that had been filed against the firm.

The intensity of the complaints rose against the firm between August 2022 and November 2022. With the rising number of complaints, the authorities had to intervene and look into the matter.

Majority of the Complaints

Out of all the complaints filed against the firm, there is an abundance of complaints pertaining to the firm’s misinformation and false representations.

The complainants have raised particular concerns over one particular digital token. The authorities are going all in when it comes to investigating the matter and want to get to the bottom of it.

They have asked the complainants to also submit their complaints online as well as ready the necessary information to support their claims.

They have been advised to collect and provide transactional data that was performed between then and the platform. The complainants are also required to submit verifiable documents so the case runs smoothly.

The international media sources also reached out to both the authorities and the firm but none of them have commented yet.

Hodlnaut Already Became Controversial

The firm had already become controversial even before the users had launched complaints against it. It was back on August 8 when the firm announced that it had suspended the withdrawals feature for their users.

The firm cited a liquidity crisis stopping it from allowing the users to withdraw their funds which would impact the firm’s liquidity.

Hodlnaut’s suspension of the withdrawals came months after the Terra ecosystem crash. Many firms had to file for bankruptcy due to the Terra network crash.

Claim by the Firm

Although the firm claimed that it was not impacted by the Terra ecosystem crash. But the data shared by the on-chain sources revealed it had $150 million locked with Terra in the form of TerraUSD (UST).

USTC, formerly known as UST, ended up losing its dollar peg, causing catastrophe throughout the cryptocurrency industry.

It cost the cryptocurrency industry over $800 billion, dragging down the crypto industry’s overall valuation.

UST and LUNC May Face the Impact

The investigation is currently ongoing against the firm. However, if it is found guilty of the allegations that have been made against it, then UST and LUNC may also take a negative hit.

Investors must remain cautious and stay up to date to see what unravels in near future.