In a recent development reported by The Block, South Korean authorities have taken into custody three high-ranking executives from the cryptocurrency income platform, Haru Invest. This move comes in the aftermath of serious allegations accusing them of embezzling approximately 1.1 trillion won ($826 million) from the platform's user base. The report from The Block on February 6, 2024, reveals that among those arrested are the two co-CEOs of Haru Invest.
The Seoul Southern District Prosecutor's Office has leveled accusations against Haru Invest, asserting that the platform diverted cryptocurrency funds totaling around $826 million, affecting nearly 16,000 users. Prosecutors claim that the company engaged in deceptive practices by promoting its operations as being supported by a "risk-free distributed investment technology," all the while channeling customer deposit investments predominantly through a single individual.
Haru Invest, known for its Earn Plus product offering a lucrative up to 12% yield, has been under the scrutiny of local authorities since it abruptly halted withdrawals on June 14, 2023. Adding to the complexity, cryptocurrency lender Delio, a previous collaborator with Haru Invest, is also under investigation. Delio suspended withdrawals, citing issues arising from the sudden cessation of deposits and withdrawals by Haru Invest.
These legal actions against Haru Invest and its executives shed light on the regulatory challenges facing cryptocurrency platforms and the potential cascading effects within the industry.