Crypto yield platform Haru Invest executives were arrested in South Korea on allegations of embezzling $826 million. It is indicated that Haru Invest advertised with a slogan promising 12% returns while concealing the risks and making misleading advertisements to deposit holders.
Three Haru Invest Executives Detained
South Korean prosecutors announced that they have arrested three executives of the crypto yield platform Haru Invest, including two co-CEOs, following their detention. The Seoul Southern District Prosecutors’ Office accused the three individuals of stealing approximately 1.1 trillion South Korean won ($826 million) in cryptocurrency from about 16,000 users.
It was also alleged that Haru Invest invested most of the customer deposits through a single individual and made misleading statements about managing the deposits with “risk-free distributed investment techniques.” Haru Invest was offering users returns of up to 12% through its Earn Plus product.
The Fall of FTX Leads to Domino Effect
Local authorities had launched an investigation into Haru Invest and the crypto lending platform Delio after both companies suddenly suspended withdrawal transactions on June 14, 2023. Delio linked the suspension of its operations to the sudden halt of deposit and withdrawal transactions at Haru Invest earlier that day, with whom Delio had previously collaborated.
On the same day, Haru Invest reported a loss of over $260 million due to the collapse of the cryptocurrency exchange FTX, while filing a complaint against consignment operator B&S Holdings for allegedly deceiving the company with false reports. Last month, South Korean prosecutors issued an arrest warrant for a person named Bang, a majority shareholder of B&S. Due to South Korea’s privacy rules, Bang’s real name was not disclosed.
In a statement shared with The Block, the prosecution said, “While thoroughly determining the true nature of the alleged crime through investigation, we will do our utmost to compensate the losses and recover the proceeds of the crime.”
