Nearly four years after the Terra ecosystem implosion sent shockwaves through the crypto lending world, Singapore’s legal system is catching up with one of its casualties. Zhu Juntao, the 36-year-old former CEO of crypto lender Hodlnaut, was charged on May 26 with six counts of fraud by false representation.
The charges stem from statements Zhu and Hodlnaut employees allegedly made between May and July 2022, claiming the platform had no direct exposure to TerraUSD (UST) and had therefore avoided losses from its collapse. The reality, according to investigators, was considerably different: roughly $317 million of user funds had been converted into UST and deposited into the Anchor protocol, resulting in approximately $190 million in realized losses.
What Zhu is actually charged with
Singapore Police said Zhu was charged following an investigation by the Commercial Affairs Department. He faces three charges under Section 424A(1)(a) read with Section 424A(3) of the Penal Code 1871, plus three additional charges under the same provision read with Section 109.
The Section 109 charges are notable because they relate to abetment, suggesting prosecutors believe Zhu directed others to spread the misleading statements. Allegations indicate Zhu instructed employees to disseminate the false claims through Hodlnaut’s official channels while also using his personal social media to reinforce the narrative.
If convicted on any single count, Zhu faces up to 20 years in prison per charge.
The timeline matters here. The Terra/UST ecosystem collapsed in May 2022. The allegedly false statements were made from May through July 2022. Hodlnaut suspended withdrawals on August 8, 2022, roughly six weeks after the last alleged misrepresentations. Singapore’s Commercial Affairs Department initiated its investigation into Hodlnaut and its directors around November 2022.
The Hodlnaut collapse, in context
Hodlnaut was a Singapore-based crypto lending platform that offered attractive yields on user deposits. The business model involved taking customer deposits and deploying them into DeFi protocols to generate returns, including the Anchor protocol, which offered roughly 19.5% APY on UST deposits. When UST lost its dollar peg in May 2022 and spiraled toward zero, the $317 million in user funds converted to UST resulted in $190 million in losses, effectively rendering the company insolvent.
After halting withdrawals in August 2022, Hodlnaut entered judicial management proceedings. Those proceedings eventually transitioned into full liquidation. As of 2026, the liquidation process continues with limited progress on recovering assets or compensating the platform’s creditors.
Why this case matters for crypto investors
The charges against Zhu aren’t about running a risky investment strategy. The fraud charges center on what was allegedly said after those losses materialized. Regulators and prosecutors appear to be drawing a clear line: losing customer money through poor risk management is one thing, but telling customers you didn’t lose their money when you actually did is criminal fraud.
The charges filed in May 2026 represent the first criminal prosecution of a crypto firm’s leadership linked to misleading communications following the crash of the Terra ecosystem. Singapore’s Commercial Affairs Department initiated its investigation into Hodlnaut and its directors around November 2022, meaning the time from the start of the probe to formal charges was approximately three and a half years.