In a shocking turn of events, several executives of Haru Invest, a cryptocurrency yield platform, have been arrested by South Korean authorities for embezzling customer funds. This comes just a day after Terraform Labs CFO was extradited to South Korea from Montenegro.
Haru Invest has been under scrutiny since June 2023, when withdrawals were suddenly suspended, leaving investors unable to access their funds. Prosecutors allege that the executives stole around 1.1 trillion won ($830 million) worth of cryptocurrency from thousands of customers.
The Virtual Asset Crime Investigation Unit of the Seoul Southern District Prosecutors Office has arrested the CEO and two other executives on charges of embezzlement. This follows a series of events that have plagued the platform, which was established in 2019 and promised high annual interest rates on cryptocurrency deposits.
According to prosecutors, the executives engaged in misappropriation and diverted customer funds while falsely portraying the platform as using “risk-free diversified investment techniques” between March 2020 and June 2023.
The downfall of Haru Invest began when it paused withdrawals and deposits in June 2023, citing issues with service partners. This led to the firing of approximately 100 employees. The platform also claimed to be facing challenges due to alleged fraudulent activity by consignment operator B&S Holdings.
Investors, including Delio, also suspended withdrawals last year after being unable to access their funds in Haru Invest, filed a class-action lawsuit against the platform in June 2023.
As the events continue to unfold, investors are left in uncertainty as the company has not provided any updates on the investigations and efforts to recover assets. The lack of information and the detention of the CEO have only added to investors’ frustration.
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