In South Korea, top executives from the cryptocurrency investment platform Haru Invest have been detained by the authorities over accusations of swindling a staggering $826 million from their clients. The executives are alleged to have lured investors with high return promises while hiding the inherent risks and fabricating deceptive advertising claims.
Arrests Shine Light on Management’s Misconduct
The local prosecution office has confirmed the arrest of three Haru Invest leaders, including two co-CEOs, charging them with a massive cryptocurrency theft from around 16,000 investors. This has raised significant concerns regarding the security and reliability of crypto investment platforms.
Investigations reveal that Haru Invest had placed most client funds under the control of a single person while falsely promoting the use of ‘risk-free distributed investment techniques.’ The platform had been offering up to 12% returns through their Earn Plus product, misleading depositors about the safety of their investments.
Crypto Platform Collapse Triggers Broad Impact
The operations of Haru Invest came under scrutiny after they, along with another crypto lending service Delio, halted withdrawals without warning. Delio’s suspension was directly tied to Haru Invest’s earlier cessation of transactions. This event unfolded concurrently with Haru Invest’s report of substantial losses due to the downfall of FTX, a major cryptocurrency exchange.
In a related development, an arrest warrant was issued for an individual with significant shares in B&S Holdings, connected to Haru’s reported losses. The prosecution is committed to thoroughly investigating the case and ensuring that victims’ losses are compensated and that the illicit gains are recovered.