Ex-Hodlnaut CEO charged over Terra crash claims

The former chief executive of Hodlnaut has been charged in Singapore over alleged false claims linked to the 2022 collapse of the Terra ecosystem, as reported by multiple media.

Zhu Juntao, 36, faces six charges of fraud by false representation after a probe by Singapore’s Commercial Affairs Department. Prosecutors allege he misled users about the company’s exposure to TerraUSD (UST) during one of crypto’s biggest market crashes.

Authorities said Zhu allegedly instructed employees to issue misleading statements in Hodlnaut’s official Telegram group and in emails sent to users between May and July 2022.

The communications allegedly claimed the platform “did not have direct exposure to UST” and “had not suffered losses arising from the UST crash”.

Police also alleged Zhu published three similar statements on his personal X account in June 2022.

If convicted, Zhu could face up to 20 years in prison, a fine, or both, for each charge.

Terra fallout

The case revives scrutiny of the dramatic collapse of the Terra ecosystem in May 2022.

The algorithmic stablecoin TerraUSD lost its peg to the US dollar, wiping out around US$50bn in market value within days. The crash triggered panic across the digital asset sector and fuelled a wider crypto lending crisis.

Several major crypto lenders collapsed in the aftermath, including Celsius Network and Voyager Digital.

Platform collapse

Singapore-based Hodlnaut had more than 30,000 users worldwide before financial troubles pushed the company into collapse in August 2022.

The platform halted withdrawals that year, leaving customers unable to access funds. Its website now states that the company’s affairs and assets are under the control of court-appointed liquidators.

“Dealing in cryptocurrencies is highly risky and not suitable for the general public, who also face the risk of service providers collapsing due to fraud,” police said.

Police said the case highlights the risks tied to digital assets and warned consumers to remain cautious when dealing with cryptocurrencies.