Key takeaways:
- The problematic crypto yield platform Haru Invest has had multiple executives detained by South Korean prosecutors.
- Prosecution claims that between March 2020 and June 2023, executives at Haru Invest reinvested most of the coins that clients had deposited.
The problematic cryptocurrency yield platform Haru Invest, which stopped accepting withdrawals in June 2023, has had multiple executives detained by South Korean prosecutors.
According to a report by local news agency Yonhap on February 6, the Seoul Southern District Prosecutors Office’s virtual asset criminal investigation section has detained three prominent figures associated with Haru Invest.
The CEO of Haru Invest and two other executives were among the people detained, according to what the prosecution had revealed. The executives are in custody on accusations of embezzling 16,000 Haru Invest clients out of 1.1 trillion won ($830M) in bitcoin.
Prosecution claims that between March 2020 and June 2023, executives at Haru Invest reinvested most of the coins that clients had deposited. According to the allegations, the ex-partners misrepresented Haru as running a reliable company with diversified investment strategies that are risk-free.
The announcement was made soon after Haru Invest published another “no information” statement. On February 4, the company posted on X, stating that there are “no particular updates to share this week.” Hugo Lee, CEO of Haru Invest, has signed the declaration. It says that:
“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.”
On June 13, 2023, Haru Invest immediately stopped accepting withdrawals. The following day, withdrawals were also halted by Delio, a depository and management business that held some of its funds with Haru Invest.
Subsequently, Haru Invest asserted that the problems stemmed from purported fraudulent behavior on the part of consignment operator B&S Holdings, which was previously Aventus.
When Haru Invest was founded in 2019, it advertised itself as a platform that offered cryptocurrency yielding investors the chance to earn interest rates on deposits of up to 12% annually.
Delio and other impacted investors launched a class-action lawsuit against Haru in June 2023 in response to the withdrawal suspension.
