Zhu Juntao, the former CEO of the failed crypto lender Hodlnaut, has been charged with fraud in Singapore due to allegations of misleading customers regarding the firm’s exposure to the TerraUSD collapse. According to authorities, Zhu instructed employees to issue false statements on Hodlnaut’s Telegram and in customer communications, asserting that the company had no direct involvement in the TerraUSD crisis.

Key details include:

— Singapore has formally charged Zhu Juntao with six counts of fraud for allegedly deceiving customers about Hodlnaut’s exposure to TerraUSD in 2022.

— Zhu is accused of directing his team to spread misinformation on Telegram and through customer emails, claiming Hodlnaut was unaffected by the Terra collapse.

— The company reportedly lost around $189.7 million due to its exposure from Terra, having invested approximately $317 million of user deposits into Terra’s Anchor Protocol.

The Singapore Police Force announced on Tuesday that Zhu faces six charges of fraud by false representation. Prosecutors allege that in 2022, he instructed staff to make false claims across Hodlnaut’s Telegram channels and in emails to customers, insisting that the company did not experience losses from the TerraUSD collapse.

Additionally, authorities noted that Zhu reiterated similar assertions on his personal X account, formerly known as Twitter, in three posts in June 2022. Should he be found guilty, Zhu could face up to 20 years in prison, fines, or both for each charge under Singaporean law.

Zhu has denied all six allegations in court, with a pre-trial conference scheduled for June 2026, as reported by local media.

Hodlnaut was among several crypto lenders that collapsed following the breakdown of Terraform Labs’ algorithmic stablecoin ecosystem in May 2022. This incident wiped out approximately $40 billion from the crypto market and led to the downfall of other firms like Three Arrows Capital, Celsius, and Voyager.

During Hodlnaut’s restructuring proceedings, reports indicated that the firm had funneled around $317 million of user funds into Terra’s Anchor Protocol, which had been offering around 19.5% annualized yield on UST deposits prior to the collapse that rendered UST nearly worthless.

Judicial managers later estimated that Hodlnaut suffered losses of about $189.7 million due to its exposure to the Terra fallout. Reports from the restructuring proceedings revealed that the company struggled with inadequate internal recordkeeping, and some executives did not fully cooperate with investigators.

Founded in 2019, Singapore-based Hodlnaut provided yield-bearing crypto accounts and served over 30,000 users worldwide before halting withdrawals in August 2022. Subsequently, the company entered judicial management and was ordered into liquidation by the Singapore High Court.