South Korea Arrests Three Haru Invest Executives For Embezzlement Of $826 Million

Key Points:

• South Korea arrests Haru Invest executives for $826 million in crypto embezzlement.
• Regulatory scrutiny grows over crypto lending practices.
• This case underscores global concerns about the stability of the cryptocurrency sector.

According to The Block, South Korean authorities have apprehended and detained three Haru Invest executives, including both co-CEOs, on allegations of embezzlement.

South Korean Authorities Detain Haru Invest Executives

The Haru Invest executives stand accused of pilfering approximately 1.1 trillion Korean won (about $826 million) in cryptocurrencies from over 16,000 users. Investigations reveal that cryptocurrency yield platform Haru Invest falsely promoted its deposits as managed through “risk-free distributed investment technology” while concentrating most deposits on an individual.

The regulatory crackdown comes amid concerns over the stability and transparency of the cryptocurrency lending sector. The arrest warrants signal an intensified focus on safeguarding consumers against the risks inherent in crypto lending. Authorities are actively probing Haru Invest‘s alleged mismanagement of client deposits, particularly regarding sudden withdrawal suspensions.

Global Concerns Mount Over Cryptocurrency Sector Stability

Notably, Haru Invest’s Earn Plus product boasted returns of up to 12% for users. The company’s troubles became apparent when cryptocurrency lending platform Delio, managing nearly $1 billion in Bitcoin, halted withdrawals due to its association with Haru Invest.

The latter had suspended deposit and withdrawal services, prompting a criminal complaint against depository operator B&S Holdings, accusing it of fraud and incurring significant losses in the FTX exchange collapse.

Additionally, Delio’s entanglement in the affair deepened as reports surfaced of its agreement to lend $600 million to investment fund Three Arrows Capital (3AC) shortly before the latter filed for bankruptcy.