South Korean authorities have brought forth allegations against Haru, a crypto yield platform, indicating that it misrepresented risks to its depositors while enticing them with a lucrative 12% return. In a notable development, South Korean prosecutors announced on Monday the arrest and detention of three top executives from Haru Invest, among whom are the co-CEOs.
South Korea’s Anti-Corruption Drive
Seoul prosecutors have leveled accusations against the trio, alleging the misappropriation of approximately 1.1 trillion Korean won (equivalent to $826 million) in cryptocurrencies from roughly 16,000 users. An official from the Seoul Southern District Prosecutor’s Office confirmed these details to The Block. Additionally, it’s reported that Haru purportedly entrusted a significant portion of its client deposits to a single individual while falsely assuring investors that their funds were managed through “risk-free distributed investment techniques.” Notably, Haru Invest enticed clients with the promise of up to a 12% yield for users of its Earn Plus product.
Local authorities have been actively investigating both Haru and another crypto lender, Delio, following the abrupt suspension of withdrawals on June 14, 2023. Delio attributed the suspension to the sudden cessation of deposits and withdrawals earlier that day at Haru Invest, with whom Delio had previously collaborated. Simultaneously, Haru lodged a criminal complaint against B&S Holdings, a consignment operator, alleging deception and citing losses exceeding $260 million due to the collapse of FTX. South Korean prosecutors had previously issued an arrest warrant for an individual identified as Bang, the majority shareholder of B&S. However, due to privacy regulations in South Korea, Bang’s full name remains undisclosed.
The unfolding saga sheds light on the intricate web of alleged deceit and financial malpractice within the crypto industry. The arrest and detention of Haru Invest executives mark a significant development in the ongoing investigation into what appears to be a far-reaching and elaborate scheme. Authorities remain vigilant in their pursuit of justice amidst mounting concerns over the integrity and transparency of crypto investment platforms in South Korea and beyond.