Former Hodlnaut CEO charged over alleged false Terra claims

Former Hodlnaut chief executive Zhu Juntao was charged in Singapore with six counts of fraud by false representation, the police announced. The charges follow an investigation by the Commercial Affairs Department. Zhu, 36, faces three counts under Section 424A(1)(a) read with Section 424A(3) of the Penal Code and three counts under the same provision read with Section 109. Each count carries a maximum penalty of up to 20 years in prison, a fine, or both.

Authorities allege that between May and July 2022 Zhu directed employees to post misleading statements in Hodlnaut’s official Telegram group and to send emails to some users claiming the platform had no direct exposure to the TerraUSD stablecoin and had not suffered losses from its collapse. Police also allege Zhu posted three similar messages on his personal Twitter account, now known as X, in June 2022.

The charges relate to the May 2022 collapse of the Terra ecosystem, when the algorithmic stablecoin UST lost its dollar peg and about $50 billion in market value was wiped from the crypto market. The collapse contributed to distress at several crypto lending platforms.

Hodlnaut, a Singapore-based platform that offered token deposits for yield, halted withdrawals and became defunct in August 2022. Police say the firm had more than 30,000 users worldwide before its collapse. Court-appointed liquidators are managing the company’s affairs.

Other crypto lenders, including Celsius Network and Voyager Digital, also failed during the 2022 market turmoil; Celsius reported more than $10 billion in assets before its collapse, and Voyager listed between $1 billion and $10 billion in assets and liabilities in its Chapter 11 filing. The Commercial Affairs Department led the investigation that resulted in the charges. The court-appointed liquidators did not immediately respond to requests for comment.

Earlier this month, we reported that Terraform alleged Jane Street dumped $192M UST via a private Telegram chat.