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Haru Bosses Arrested: South Korea Cracks Down

Last Updated February 6, 2024 12:02 PM
Teuta Franjkovic
Last Updated February 6, 2024 12:02 PM

Key Takeaways

  • Three Haru Invest execs were arrested for allegedly stealing millions worth of crypto from investors.
  • Haru Invest is accused of misusing client funds and falsely promoting high yields.
  • The company filed a complaint against B&S Holdings for contributing to millions of losses during the FTX collapse.

On Monday, South Korean prosecutors revealed  the arrest of three top executives from the cryptocurrency yield platform Haru Invest, including both co-CEOs.

According to a representative from the Seoul Southern District Prosecutor’s Office, the trio is accused of misappropriating cryptocurrencies valued at approximately 1.1 trillion Korean won ($826 million) from nearly 16,000 investors.

Haru Invest Execs Detained Over Alleged $826 Million Crypto Theft

The officials allege that Haru Invest predominantly funneled client funds through a single individual, contrary to their claims of employing “risk-free distributed investment techniques.” Furthermore, the platform had been promoting yields as high as 12% for users of its Earn Plus product.

The investigation into Haru, along with crypto lending firm Delio, was prompted by the unexpected halting  of withdrawals by both entities on June 14, 2023. Delio cited  Haru Invest’s abrupt cessation of deposits and withdrawals as the reason for its suspension, pointing to a previous partnership between the two firms.

CEO Issues ‘No Information’ Update on X

Following recent tumultuous events, Haru Invest issued a notably brief update . On February 4, the company used the platform X to communicate with its stakeholders, stating that there were “no particular updates to share this week.”

The succinct message, undersigned by Haru Invest’s CEO Hugo Lee, stands in stark contrast to the unfolding legal and financial challenges the firm is currently facing.

Complaint Against B&S Holdings Amid $260M Loss in FTX Collapse

In a concurrent development, Haru Invest lodged a criminal complaint against B&S Holdings , the consignment operator, accusing it of submitting fraudulent reports and contributing to a loss exceeding $260 million during the FTX collapse.

South Korean prosecutors, who issued an arrest warrant last month for an individual referred to as Bang, a principal stakeholder of B&S Holdings, are navigating the case with caution due to the country’s privacy regulations, which restrict the full disclosure of Bang’s identity.

Founded in 2019, Haru Invest operated a cryptocurrency yield platform, promising investors attractive annual interest rates as high as 12% on their cryptocurrency deposits.

However, the firm’s operations hit a significant roadblock when withdrawals were abruptly suspended. In response to this disruption, Delio, along with other impacted investors, initiated a class-action lawsuit against Haru in June 2023, marking a serious escalation in the platform’s ongoing challenges.

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