In recent years, the cryptocurrency circle has become a place of controversy, because too many people in this circle are looking to make quick money and reap the benefits. Many projects have had impure purposes since their creation, and too many investors have inexplicably fallen into scams, causing their hard-earned money to go down the drain. Therefore, in many cases, investors and project owners are in a state of hostility.
A recent accident just proves this point.
On August 28, Hugo Hyungsoo Lee, CEO of South Korean virtual asset custody company Haru Invest, appeared in court on time. During his appearance, he was suddenly attacked with a knife by a 51-year-old spectator. He was rushed to the hospital and is no longer in danger of death.
It is understood that the company was suspected of embezzling digital assets worth approximately US$826 million from more than 16,000 customers and was detained and prosecuted for fraud by South Korean prosecutors in February this year.
As the saying goes, "every wrong has its perpetrator, every debt has its creditor", and it all started with a cryptocurrency scam.
To fully understand the circumstances surrounding this attack, we must first start with a case of cryptocurrency fraud.
Haru Invest is a virtual asset custody service company in South Korea. According to data, the company developed well in the early stage and was relatively active from March 2020 to June 2023, and once had about 16,000 users.
To the outside world, Haru Invest has always advertised itself as a risk-free, high-yield investment platform, but in fact it pursues a high-risk trading strategy. On June 13, 2023, an accident occurred. Haru Invest suddenly suspended customer withdrawal services without any prior notice. Delio, another cryptocurrency platform whose funds are managed by Haru Invest, also suspended withdrawals the next day.
The sudden suspension of withdrawals caused a huge uproar among investors and attracted the attention of South Korean prosecutors. South Korean prosecutors later charged three executives of the company, claiming that they stole user deposits worth about $826 million. The case also caused an uproar in South Korea because it was one of the largest cryptocurrency scams in South Korea.
At around 2 p.m. on August 28, the 15th Criminal Division of the Seoul Southern District Court was conducting the eighth public trial of the case. While Haru Invest CEO Lee was on trial for mismanaging the company's $826 million worth of cryptocurrencies, a 51-year-old man surnamed Jiang suddenly attacked Lee. The attacker was a victim who suffered financial losses in the deposit freeze incident.
It claims that you can get high returns by depositing Bitcoin, but in fact it is a scam trap...
Haru Invest was founded in South Korea and is headquartered in Singapore. According to its official website, it has about 80,000 members in 140 countries and manages more than US$2 billion in assets.
Haru Invest has always advertised that as long as you deposit Bitcoin, Ethereum or the world's largest dollar stablecoin USDT, you can provide an annual interest rate return of up to 12%. Such attractive publicity naturally attracted a large number of users to deposit funds.
However, in June 2023, Haru Invest suddenly suspended deposits and withdrawals, and threw the blame on its partners. The South Korean prosecutors and police immediately banned the company's senior executives from leaving the country and launched an investigation. In February of this year, the prosecutors formally detained and prosecuted three executives of the company (including Lee, but Lee was released on bail in July this year) for fraud under the Specific Economic Crimes Aggravated Punishment Act.
In addition to being accused of stealing 1.1 trillion won, Haru Invest was also exposed to have invested most of the customer deposits in its own name, misappropriated most of the tokens deposited by customers, and falsely advertised that the deposits were managed through "risk-free distributed investment technology."
Things are unpredictable, count the ups and downs of the lives of crypto giants...
The cryptocurrency world is complicated. In order to make quick money and get rich overnight, many people choose to do things that are borderline and cross-border. In the end, they may also suffer backlash.
On June 15, 2023, news came from the cryptocurrency market that due to the continuous decline in the overall market, the well-known investment institution Three Arrows Capital encountered a margin call. Zhu Su, co-founder of Three Arrows Capital, also posted a message on his social media, saying that "we are communicating with relevant parties and are fully committed to resolving this issue", which indirectly confirmed the rumors.
In fact, the ice is three feet thick, and it is not formed in a day. The frequent collapse of the Luna project has brought extremely negative impacts to Three Arrows Capital. Before June 2023, Three Arrows Capital began to sell a large amount of Ethereum, and its founder even deleted the information related to ETH tokens on his Twitter; then, Three Arrows Capital was exposed to be frantically cashing out stETH to repay debts, and even exposed the scandal of misappropriating user funds privately.
On September 19, Zhu Su, founder of Three Arrows Capital, was arrested at Singapore Changi Airport and sentenced to four months in prison, confirming rumors of his bankruptcy.
There is no doubt that Three Arrows Capital plays an important role in the cryptocurrency circle, and it is not an exaggeration to call it one of the most successful crypto hedge funds in the world. The incident of Three Arrows Capital has brought an unprecedented impact on the entire cryptocurrency field.
Coincidentally, Do Kwon (Chinese name Quan Daoheng), the founder of the cryptocurrency ecosystem Terraform Labs, also had a similar experience. The cryptocurrencies TerraUSD and Luna he founded collapsed in May 2022, causing global investors to lose approximately $40 billion and suspected financial fraud. On September 19, 2022, the Seoul South District Prosecutor's Office in South Korea applied to Interpol for a red warrant to assist in the pursuit of Do Kwon. On March 23, 2023, Quan Daoheng was arrested in Montenegro, and then US prosecutors accused Kwon of defrauding cryptocurrency customers.
Interestingly, the SEC court documents disclosed a Slack chat process that took place in 2019, in which Do Kwon almost bluntly admitted that they had forged the trading volume. In addition, many explosive "melons" are also hidden in it, with a huge amount of information. For example, Do Kwon said, "I can create fake transactions that look real... This will incur fees"; he made a less positive evaluation of Terra, saying, "Only those who believe that Terra is the jewel in the crown (Hashed, 1kx) and those who run a staking business (polychain) will pledge"; even crazier, Do Kwon directly exposed himself as a wolf, "I also pre-mined 1 billion SDT for ourselves" (Terra ecosystem has a huge variety of stablecoins, including US dollar stablecoins, Korean won stablecoins, etc. The most special one is TerraSDT, SDT is a stablecoin anchored to the IMF's special drawing rights). All these things are shocking.
Perhaps it is because the huge profit margins of virtual currencies are fascinating, or perhaps everyone has experienced the joy of making quick money in the cryptocurrency circle. Since the rise of the cryptocurrency circle, various explosive projects and Ponzi schemes have emerged one after another. Today's star project may become tomorrow's junk scam; today's cryptocurrency bigwigs may become tomorrow's prisoners. So, again, the cryptocurrency circle has risks, please be sure to stay calm and cautious.
