Haru Invest promised safe, high-yield crypto returns but left thousands of investors in despair when it froze withdrawals and collapsed under a $1 billion fraud.
Haru Invest, a South Korean crypto yield platform accused of defrauding over 16,000 investors, has been declared bankrupt by the Seoul Rehabilitation Court, according to a local news report.
The platform, which operated under Haru Management Limited, collapsed in June 2023 after abruptly freezing withdrawals, leaving investors in financial turmoil. This sudden shutdown triggered widespread panic, exposing what investigators later described as a massive fraudulent scheme.
Promises that Crumbled
While Haru Management Limited was registered in the British Virgin Islands, its primary operations were based in South Korea. The company gained widespread popularity by promising safe investments with lucrative returns on crypto deposits. These assurances drew thousands of investors, many of whom entrusted their life savings to the platform.
However, trouble began in paradise when the platform failed to honor its promise of double-digit yields and abruptly shut down. Shortly after, Haru Invest laid off more than 100 employees blaming issues with service partners.
In February 2024, South Korean authorities arrested several top executives of Haru Invest, including CEO Hugo Hyungsoo Lee, on charges of fraud and laundering customer funds. Prosecutors accused the company of misappropriating investor money between March 2020 and June 2023, despite its claims of offering “risk-free, diversified investment strategies.”
At the time, investigators uncovered a staggering fraud of 1.4 trillion won (approximately $1 billion), stolen from 16,000 investors.
The arrests were part of broader efforts to hold the perpetrators accountable and recover stolen assets. However, the scale of the financial damage has left many investors skeptical about the likelihood of significant restitution.
The fallout escalated in August 2024 when Hyungsoo Lee, standing trial for his role in the scandal, was stabbed multiple times by an enraged investor in the courtroom.
Bankruptcy Proceedings Offer a Path to Recovery
Following the arrests and ongoing trials, the Seoul court has declared Haru Invest bankrupt, paving the way for asset liquidation. The bankruptcy proceedings aim to provide a structured pathway for recovering at least a portion of the defrauded funds.
According to the report, a creditors’ meeting has been scheduled for February 11, 2025, where a bankruptcy administrator will assess Haru Management’s financial records and oversee the liquidation of its assets.
Unlike criminal cases, which offer limited options for asset recovery, the bankruptcy process empowers trustees to seize and distribute the company’s remaining accounts, cryptocurrencies, and other financial holdings. While full recovery remains uncertain, investors see this as a glimmer of hope after months of financial despair.
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