- Three Haru Invest executives were arrested on charges of embezzling customer funds.
- Allegations were made that executives misappropriated funds after falsely advertising the platform.
- A class action lawsuit has been filed seeking clarity on the investigation.
A day after Montenegro extradited Terraform Labs CFO to South Korea, South Korean authorities arrested several executives of cryptocurrency yield platform Haru Invest on charges of embezzlement. The arrests follow the suspension of platform withdrawals in June 2023, leaving investors unable to access their funds.
Prosecutors alleged that the executives stole about 1.1 trillion won worth of cryptocurrency from thousands of Haru Invest customers, sparking outrage and legal action.
Haru Invest executive indicted on embezzlement charges
The Seoul Southern District Prosecutors’ Office’s virtual asset crime investigation team arrested Haru Invest’s CEO and two executives on charges of embezzling customer funds. The arrests follow a series of tumultuous incidents that have plagued the cryptocurrency yield platform since mid-2023.
Founded in 2019, Haru Invest attracted the attention of investors by promising interest rates of up to 12% per annum on initial cryptocurrency deposits. But the platform’s sudden suspension of withdrawals last June sparked widespread concern and scrutiny.
Prosecutors allege that executives committed embezzlement by misappropriating customer funds from March 2020 to June 2023 while falsely portraying the platform’s operations as using “risk-free diversified investment techniques.”
History of Haru Invest
Haru Invest’s downfall unfolded rapidly after it temporarily suspended deposits and withdrawals in June 2023 due to problems with its service partner. About 100 employees were laid off after the withdrawal was halted.
Suspicions were further amplified by the platform’s claim that it was experiencing difficulties due to allegations of fraudulent activity by its consignment operator, B&S Holdings (formerly Aventus).
Investors, including Delio, a depository management company that stopped withdrawals last year because they were unable to access funds held in Haru Invest Asset, filed a class action lawsuit against Haru in June 2023.
As the case unfolded, the company’s “no information” update and the detention of its CEO left investors confused as they desperately sought clarity on the investigation and asset recovery efforts.