South Korean Authorities Arrest Three Executives In Haru Crypto Fraud Scheme

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South Korean Authorities Arrest Three Executives In Haru Crypto Fraud Scheme

Last week, South Korean authorities arrested three executives at yield platform Haru Invest for allegedly stealing 1.1 trillion won ($828 million) worth of crypto from around 16,000 customers, according to a report from Yonhap News. According to the report, the company’s two co-CEO’s were among the executives arrested. According to reports, the investigation is being conducted by the Joint Investigation Team of Virtual Asset Crimes of the Seoul Southern District Prosecutors' Office.

Haru Invest, which once promised double-digit yields for crypto deposits on the platform, abruptly suspended withdrawals and deposits in June last year, citing issues with service partners, and fired around 100 employees shortly afterward. Yonhap reports the platform is suspected of “rug pulls,” falsely representing its investment strategies and misappropriating client deposits between March 2020 and June 2023. Instead of employing the promised “risk-free distributed investment techniques,” Haru Invest allegedly concentrated most of its client funds through a single individual, misleading investors about the nature of their investments.

In a related development, Haru Invest lodged a criminal complaint against B&S Holdings, the consignment operator, accusing it of submitting fraudulent reports and contributing to a loss exceeding $260 million during the FTX collapse.

South Korean prosecutors, who issued an arrest warrant last month for an individual referred to as Bang, a principal stakeholder of B&S Holdings, are navigating the case with caution due to the country’s privacy regulations, which restrict the full disclosure of Bang’s identity.

“[We] will thoroughly identify the true nature [of the alleged crime] through the investigation, while doing the best to recover damages and return criminal proceeds,” the prosecutor's office said in a statement shared with The Block.

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