Haru Invest Scandal Shakes Crypto Industry: Executives Detained in $826 Million Embezzlement Case

The Accusations: Details of the Alleged Misconduct

The downfall of Haru Invest began to unravel when South Korean prosecutors announced the arrest of the firm’s top brass, including its two co-CEOs. The gravity of the situation became apparent with the revelation of the staggering sum involved: approximately 1.1 trillion Korean won ($826 million), allegedly stolen from around 16,000 users. This monumental accusation paints a picture of a large-scale breach of trust and financial misconduct.

Haru Invest, which had positioned itself as a reliable crypto yield platform, is accused of grossly misleading its investors. The company, which promised up to 12% yield on its Earn Plus product, is now under scrutiny for its investment practices. Prosecutors allege that instead of employing the advertised “risk-free distributed investment techniques,” Haru Invest funneled the bulk of its client deposits through a single individual, a move that starkly contrasts its public claims and exposes a significant lack of due diligence and transparency.

The ripple effect of this alleged mismanagement was felt across the industry when crypto lender Delio, a former collaborator of Haru, also suspended withdrawals. The timing of Delio’s suspension, coinciding with Haru’s own abrupt stop on withdrawals on June 14, 2023, hints at a possibly deeper entanglement between the two firms, underscoring the pervasive uncertainty and risk that can lurk within the crypto industry.

Further complicating the scandal, Haru lodged a criminal complaint against B&S Holdings, its consignment operator, accusing it of deceit and attributing a substantial loss of over $260 million to the latter’s mishandling in the wake of the FTX collapse. This accusation adds another layer to the unfolding drama, suggesting a chain of mismanagement and questionable decisions leading to significant financial turmoil.

As the case unfolds, one individual, identified only as Bang due to South Korea’s privacy rules, has found himself in the crosshairs of the prosecutors. As a majority shareholder of B&S, Bang's involvement adds a personal dimension to the corporate scandal, bringing to light the intricate web of relationships and decisions that lie at the heart of the Haru Invest debacle.

Haru Invest Executive Investigation and Legal Proceedings

The response from South Korean authorities to the Haru Invest scandal has been swift and decisive, reflecting the seriousness with which the alleged embezzlement is being treated. The arrest and detention of the three executives, including the two co-CEOs of Haru Invest, mark a significant step in the legal proceedings, underlining the commitment of law enforcement to unravel the truth and hold those responsible accountable.

The Seoul Southern District Prosecutor’s Office has been at the forefront of the investigations, meticulously piecing together the complex web of transactions and decisions that led to the alleged misappropriation of funds. The magnitude of the scandal, involving around 1.1 trillion Korean won ($826 million) and affecting approximately 16,000 users, necessitates a thorough and detailed examination to ascertain the full extent of the misconduct and identify all parties involved.

The legal proceedings are not confined to the executives of Haru Invest. The involvement of Delio, another crypto lender that suspended withdrawals in the wake of Haru's actions, indicates the potential for a broader network of implicated entities. The abrupt suspension of services by both firms on the same day suggests a level of interconnectedness that investigators are keen to explore, as it could shed light on the operational dynamics and decision-making processes within these organizations.