How Haru Invest Scammed Thousands of Crypto Investors in South Korea
Haru Invest, a crypto yield platform that promised high returns for its users, has been exposed as a massive scam that stole over $800 million worth of crypto from nearly 16,000 investors. The platform's executives, including the two co-CEOs, have been arrested by South Korean prosecutors and are facing charges of embezzlement and fraud.
Haru Invest was launched in March 2020 as a platform that claimed to offer various investment products with different risk and reward profiles. The platform boasted of using "risk-free distributed investment techniques" and partnered with reputable crypto firms such as BitGo, Genesis Capital, and Luno. Haru Invest also offered an Earn Plus product that promised yields as high as 12% for users who deposited their crypto assets.
However, it turned out that Haru Invest was not investing the users' funds in a diversified and secure manner, but rather funneling them through a single individual, who was later identified as Bang, the main shareholder of B&S Holdings, a consignment operator. B&S Holdings was allegedly involved in submitting false reports and causing huge losses for Haru Invest during the FTX collapse in June 2023.
FTX was a crypto derivatives exchange that suffered a catastrophic liquidation event that wiped out over $260 million worth of positions. Haru Invest blamed B&S Holdings for mismanaging its funds and filed a criminal complaint against Bang. However, the prosecutors suspect that Haru Invest and B&S Holdings were colluding to deceive the investors and siphon off their money.
Haru Invest stopped allowing withdrawals and deposits for its users in June 2023, citing issues with its partners. It also laid off around 100 employees and stopped communicating with its customers. The platform's website and social media accounts have been inactive since then.
The prosecutors launched an investigation into Haru Invest and another crypto lending platform called Delio, which had a partnership with Haru Invest and also suspended its services in June 2023. The prosecutors raided the offices of both platforms and seized their servers and records. They also tracked down the executives of Haru Invest and arrested them on February 5, 2024.
The arrests of Haru Invest's executives are part of South Korea's ongoing crackdown on illegal activities in the crypto industry. The country has recently implemented stricter regulations for crypto exchanges and is working to monitor the industry more closely. The authorities have warned the public to be careful of crypto scams and to do their due diligence before investing in any platform.
Sources:
- [South Korean Crypto Executives Apprehended for Allegedly Looting $828M Worth of Crypto](https://finance.yahoo.com/news/south-korean-crypto-executives-apprehended-043338768.html)
- [Haru Bosses Arrested: South Korea Cracks Down](https://www.ccn.com/news/haru-bosses-arrested-south-korea-cracks-down/)
- [South Korean cryptocurrency executives detained over alleged embezzlement](https://www.reuters.com/article/us-crypto-currencies-southkorea-arrests-idUSKCN1HC07D/)
- [South Korean Prosecutors Arrest Haru Invest Executives Over Embezzlement Allegations: Report](https://cryptorank.io/news/feed/f2fb0-south-korean-prosecutors-arrest-haru-invest-executives-over-embezzlement-allegations-report)