Several executives of the troubled cryptocurrency earnings platform Haru Invest, which halted withdrawals in June 2023, have been arrested by South Korean prosecutors, according to a report from local news agency Yonhap on February 6. The Virtual Asset Crime Investigation Unit of the Southern Seoul District Prosecutor’s Office conducted the arrests, targeting three key figures behind Haru Invest, including the CEO and two other executives.
Prosecutors have alleged that the arrested executives were involved in the misappropriation of approximately 1.1 trillion won ($830 million) worth of cryptocurrency from around 16,000 Haru Invest customers. The investigation revealed that most of the tokens deposited by customers between March 2020 and June 2023 were siphoned off by the executives through reinvestment of the assets. Furthermore, the former officers are accused of falsely promoting Haru Invest as running a stable business utilizing "risk-free diversified investment techniques."
The recent arrests follow Haru Invest's suspension of withdrawals on June 13, 2023, which triggered concerns among depositors. The company's abrupt decision was followed by a similar move from depository and management firm Delio, which also halted withdrawals the next day. Haru Invest subsequently attributed the issues to alleged fraudulent activities by consignment operator B&S Holdings (formerly Aventus).
In a communication to X on February 4, Haru Invest's CEO Hugo Lee issued a statement indicating a lack of specific updates regarding the ongoing investigation and the broader situation following the detention of B&S Holdings' major shareholder, Fang Junhao. The company pledged continued efforts towards asset recovery amid the challenging circumstances.
Established in 2019, Haru Invest offers a cryptocurrency yield platform, enticing investors with the prospect of earning up to 12% APR on cryptocurrency deposits. However, the suspension of withdrawals in June 2023 led to Delio and other affected investors initiating a class action lawsuit against Haru Invest, seeking resolution and restitution for the impacted parties.
