In a significant legal development, Singapore has charged Zhu Juntao, the former CEO of the defunct crypto lender Hodlnaut, with six counts of fraud related to misleading customers about the company's exposure to the TerraUSD collapse in 2022.

Allegations of Misleading Claims

According to the Singapore Police Force, Zhu allegedly instructed his team to disseminate false information via Hodlnaut's Telegram channels and in emails to clients, asserting that the firm had no direct exposure to the collapse of TerraUSD and had not incurred any losses.

Additionally, prosecutors have claimed that Zhu reiterated these misleading assertions on his personal X account, previously known as Twitter, in three separate posts during June 2022. If found guilty, he could face a maximum sentence of 20 years in prison, financial penalties, or both for each charge under Singaporean law.

Zhu has contested all charges in court, with a pre-trial conference scheduled for June 2026, as reported by local media outlets.

Background on Hodlnaut

  • In the wake of the TerraUSD collapse, Hodlnaut suffered losses estimated at approximately $189.7 million after funneling $317 million of user funds into Terra's Anchor Protocol, which had promised an annual yield of around 19.5% on UST deposits.
  • The company halted withdrawals in August 2022 and subsequently went into judicial management, culminating in a liquidation order from the Singapore High Court.
  • Founded in 2019, Hodlnaut had over 30,000 users globally before its collapse.

The downfall of Hodlnaut was part of a larger trend of failures among crypto lenders following the collapse of Terraform Labs’ algorithmic stablecoin ecosystem in May 2022, which wiped out roughly $40 billion from the crypto market and led to the downfall of other firms, including Three Arrows Capital, Celsius, and Voyager.

During the restructuring process, it was revealed that Hodlnaut had inadequate internal recordkeeping and that certain executives were not fully cooperative with investigators.

For more details on this developing story, visit CoinDesk Policy.