South Korean prosecutors revealed on Monday that they had apprehended and placed under custody three executives, including its two co-chief executive officers, from the crypto yield platform Haru Invest.
The trio is facing accusations from Seoul prosecutors of embezzling about 1.1 trillion Korean won, which translates to roughly $826 million in crypto, from around 16,000 users.
Haru Invest Executives Arrested in South Korea
According to a report by local news agency Yonhap, it’s claimed that Haru Invest primarily entrusted most of its clients’ deposits to a single individual while misleadingly advertising that these funds were managed using “risk-free distributed investment techniques.”
The platform lured users with promises of up to 12% yield through its Earn Plus product.
Authorities began probing into Haru Invest and crypto lender Delio following both entities suddenly suspending withdrawals on June 14, 2023. Delio cited the suspension as a response to the abrupt halt of deposits and withdrawals earlier that day at its sister lending company, Haru Invest.
A little over a week later, the South Korean Financial Services Commission (FSC) seized all assets owned by Delio’s customers and the company, as well as other cold wallets and ledgers.
The recent development follows Haru Invest’s latest update, where the company released another statement indicating no new information to share for the week. The announcement, signed by CEO Hugo Lee, was made on X started that Haru had no updates regarding the ongoing investigations and overall circumstances after the apprehension of Bang Jun-ho, the primary shareholder of B&S Holdings.
Dear Haru Invest members, please check our announcement. pic.twitter.com/EMToEY8Mr8
— Haru Invest (@haruinvest) February 5, 2024
South Korea’s Crypto Landscape
The arrest by the Joint Investigation Team of Virtual Asset Crimes of the Seoul Southern District Prosecutors’ Office coincides with South Korea’s heightened regulatory scrutiny on cryptocurrency lending, triggered by several prominent failures last year.
In a significant step towards increasing transparency and integrity within its public sector, high-ranking public officials in the country are mandated to disclose their crypto holdings under new legislation announced by the Ministry of Personnel Management.
Meanwhile, South Korea’s major domestic crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, have unveiled plans to establish a separate information system slated to launch in June of the following year.