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Haru Invest Cryptocurrency Scandal: South Korean Prosecutors Arrest CEO and Executives
Two days following Haru’s latest update stating “no information,” South Korean prosecutors disclosed the arrest of Haru Invest’s CEO along with two additional executives. Established in 2019, Haru Invest ran a cryptocurrency yield platform promoting annual interest rates of up to 12% on cryptocurrency deposits. South Korean authorities have detained multiple executives from the troubled cryptocurrency yield platform Haru Invest, which had ceased payouts in June 2023.
According to a report by the local news agency Yonhap on February 6, the Virtual Asset Crime Investigation Unit of the Seoul Southern District Prosecutors’ Office has apprehended three key individuals associated with Haru Invest. Prosecutors reported that among those detained were Haru Invest’s CEO and two other executives. These individuals face allegations of embezzling 1.1 trillion won ($830 million) in cryptocurrency from 16,000 customers of Haru Invest. Prosecutors allege that Haru Invest executives misappropriated the majority of the coins deposited by customers through reinvesting the assets from March 2020 to June 2023. They purportedly misrepresented Haru as a stable company employing “risk-free, diversified investment techniques.
Embezzlement Allegations and Withdrawal Suspensions Rock Haru Invest
The revelation comes shortly after Haru Invest released another “no information” update. The company used X on Feb. 4 to indicate that there are “no particular updates to share this week.” The announcement, signed by Haru Invest CEO Hugo Lee, states: “As of now, no information is available regarding the investigations and overall situation following the detention of Bang Jun-ho, the major shareholder of B&S Holdings. We continue our various efforts for asset recovery as we have been doing.” Haru Invest abruptly stopped allowing withdrawals on June 13, 2023. Shortly after, Delio, a depository and management company with investments in Haru Invest, also halted withdrawals on the subsequent day. In response to the situation, Haru Invest claimed that the issues stemmed from alleged fraudulent activities by the consignment operator B&S Holdings, previously known as Aventus.
Investor Backlash: Haru Faces Class-Action Lawsuit After Withdrawal Suspension
After the withdrawal suspension, Delio and other impacted investors filed a class-action lawsuit against Haru in June 2023.
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