Hodlnaut hid a $190M Terra loss from users, then froze withdrawals for 17,000 customers

Hodlnaut was a Singapore-based crypto lending platform that took customer deposits and promised yield by lending and trading them. Around $150 million of that pool went into TerraUSD (UST), the algorithmic stablecoin that depegged and collapsed in May 2022. The position produced a loss of roughly $190 million and left a capital shortfall of about $193 million against what customers were owed.

Rather than disclose the loss, management allegedly worked to hide it. Prosecutors say founder and CEO Zhu Juntao directed employees to tell users, via Telegram and direct emails, that Hodlnaut "did not have direct exposure to UST and/or did not suffer losses" from the crash, and made similar claims himself in posts on his personal Twitter/X account in June 2022. On 8 August 2022, with the gap unresolved, Hodlnaut suspended all withdrawals, deposits and token swaps, citing only "recent market conditions," and applied for judicial management days later.

The company spent the next year in judicial management, cutting 80% of its staff and fielding a rescue bid that fell through. In January 2023 creditors rejected a restructuring proposal, and in April 2023 they voted to liquidate instead. Singapore's High Court ordered Hodlnaut's liquidation in November 2023, putting EY-appointed liquidators in charge of recovering what remained for roughly 17,000 affected creditors.

The case resurfaced in May 2026, when Singapore prosecutors charged Zhu with six counts of fraud by false representation over the UST statements, each carrying up to 20 years in prison. The charges took nearly four years to reach court, tracing back to a police probe opened shortly after the platform froze withdrawals in 2022.

Hid the loss by telling users there was no direct UST exposure, then froze withdrawals for 17,000 customers, leading to liquidation and fraud charges.

Customer deposits went into a single, unhedged bet on an algorithmic stablecoin that had no track record surviving a real depeg — Hodlnaut then had no way to make users whole when it failed.

When the loss materialized, management chose concealment over disclosure, telling users through official channels that the exposure and losses did not exist.

A lending platform cannot survive the gap between what it tells depositors and what its balance sheet shows — the freeze in August 2022 arrived only once that gap became impossible to paper over.

Disclosing a loss immediately costs less than a year of denial: Hodlnaut users were owed the truth in May 2022 and instead got a freeze, a liquidation, and fraud charges against the CEO.

Hodlnaut was ordered into liquidation by Singapore's High Court in November 2023. Its former CEO Zhu Juntao was charged with six counts of fraud by false representation in May 2026, each carrying a maximum of 20 years' imprisonment; a pre-trial conference followed the next month.