Ex-Hodlnaut CEO Charged Over Allegedly Misleading Statements

Former Hodlnaut chief executive officer Zhu Juntao was charged in Singapore on Tuesday, May 26, over allegedly misleading statements made after the collapse of TerraUSD (UST) in 2022. Prosecutors said the 36-year-old Singaporean posted claims on social media and allegedly directed employees to repeat similar assertions through Telegram and email, suggesting that Hodlnaut had no direct exposure to UST and did not suffer losses from the token’s crash. Hodlnaut, a cryptocurrency platform that allowed more than 30,000 users worldwide to deposit digital tokens in exchange for interest, later became defunct in August 2022 after financial troubles and staff layoffs.

According to the charges, Zhu allegedly made several statements on Twitter, now known as X, in June 2022. These included claims that Hodlnaut “did not take any losses on UST,” that the firm had “no price exposure to $UST,” and that the company did not incur losses from the debacle, even as users on the platform who held UST were affected. Prosecutors also said Zhu instigated Goh Chang Teck to post on Telegram before May 25, 2022, that Hodlnaut had no “direct exposure to LUNA/UST as a company” and that none of the company’s funds were used in LUNA/UST. In another alleged instance before June 28, 2022, Zhu is said to have prompted the same person to post that the “company did not make losses” and that “losses were from user funds.”

Zhu is further accused of encouraging Megan Lois Lau Shi May to send an email in 2022 to 30 addresses, saying Hodlnaut had not assumed any losses as a firm but that users on the platform who held UST did. He faces six charges of fraud by false representation linked to these statements. In court on Tuesday, Zhu indicated he was not guilty and disputed all charges. A pre-trial conference was scheduled for June.

If convicted, he could face up to 20 years in jail, a fine, or both. Police said in a statement that cryptocurrencies are volatile, speculative, and do not have underlying or fundamental value. They warned the public to remain aware of the risks, noting that crypto dealings are highly risky, unsuitable for the general public, and can also be affected by the collapse of service providers due to fraud.

The case adds to scrutiny over crypto companies that failed after the 2022 market turmoil, when the implosion of TerraUSD and related tokens caused widespread losses across the industry. Hodlnaut’s downfall in August 2022 came months after the alleged statements and amid growing concern over the platform’s financial position. Authorities said the charges relate not to the collapse itself, but to the accuracy of public statements made about the firm’s exposure and losses during that period.