South Korean authorities arrest Haru Invest execs for alleged $830 million scam
Haru Invest operated a cryptocurrency staking and lending platform, advertising annual yields as high as 12%.
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Prosecutors in South Korea have detained three key executives behind the troubled crypto yield platform Haru Invest, which suspended customer withdrawals in June 2023.
The virtual asset crime investigation unit at the Seoul Southern District Prosecutors Office arrested three individuals, including Haru Invest’s CEO, local news agency Yonhap reported Tuesday. The execs allegedly misappropriated some 1.1 trillion won in crypto deposits (worth roughly $830 million) from over 16,000 customers between March 2020 and June 2023.
Prosecutors say the Haru leadership falsely claimed to generate suspiciously high yields for investors using “risk-free diversified investment techniques.” Haru Invest operated a cryptocurrency staking and lending platform, advertising annual yields as high as 12% for users who deposited crypto assets. However, most customer funds were allegedly misused or stolen outright.
The arrests come shortly after Haru Invest claimed in a recent announcement that there were “no particular updates to share this week” regarding investigations tied to previous shareholder Bang Jun-ho’s detention.
“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,” the company said. Haru Invest CEO Hugo Lee signed the statement.
Haru Invest abruptly halted platform withdrawals on June 13, 2023. Custodial and depository management firm Delio followed suit the next day after discovering some of its crypto reserves were held by Haru. The yield platform blamed its issues on alleged fraud by former third-party operator B&S Holdings (formerly known as Aventus).
A class-action lawsuit led by Delio and affected users was filed against Haru Invest in June 2023 over frozen funds. The latest arrests indicate prosecutors likely found evidence of foul play related to or indirectly causing the company’s current legal troubles.