Top executives of Haru Invest, a South Korean crypto yield platform, were arrested by prosecutors on Monday in connection with a massive crypto fraud case valued at 1 trillion Won ($752 million).
The crypto investigation unit of the Seoul Southern District Prosecutors’ Office detained three individuals, including the CEO of Haru Invest, on charges of laundering consumer assets worth 1 trillion Won. Reports from Yonhap indicate that the platform operators deceived approximately 1,600 customers by falsely advertising up to 12% yield returns and misrepresenting risks.
Investigations revealed that the company invested most of the deposited coins from customers between March 2020 and June 2023. In June 2023, Haru Invest announced the suspension of deposit and withdrawal requests, citing issues with a service partner. However, the sudden closure of their office in Gangnam-gu, Seoul, shortly after the suspension raised suspicions among users.
Delio, a depository firm that invested in Haru Invest, also halted withdrawals, sparking controversy over a possible ‘rug-pull’ scam. Rug-pull scams, common in the crypto space, involve creators promoting a project and disappearing with investor funds. Over 100 investors filed complaints against the executives of both companies for fraud under the Specific Economic Crimes Act.
Local authorities confirmed ongoing investigations into Haru Invest and Delio following the suspension of withdrawals, as they work to hold accountable those responsible for the alleged fraudulent activities.