Top Executives of Haru Invest Arrested for Crypto Fraud in South Korea
On Monday, the Seoul Southern District Prosecutors’ Office arrested three individuals, including the CEO of Haru Invest, a South Korean crypto yield platform, for their involvement in a crypto fraud scheme worth 1 trillion Won ($752 million). The investigation revealed that the accused individuals laundered consumer assets and deceived approximately 1,600 customers.
False Promises and Misrepresentation
The prosecutors’ charges state that Haru Invest misrepresented its risks to customers by falsely advertising high yield returns of up to 12%. Their promotional materials claimed to use risk-free diversified investment techniques. However, investigations found that most of the deposited coins from customers were actually invested by the company between March 2020 and June 2023.
Haru Invest’s ‘Rug Pull’
In June 2023, Haru Invest announced the suspension of deposit and withdrawal requests, citing an issue with one of their service partners. The company claimed to be undergoing rehabilitation procedures but soon closed its office in Seoul. This sudden move raised suspicions of a ‘rug pull,’ a common scam in the crypto industry where creators disappear with investor funds.
Investor Complaints and Legal Action
Following the suspension of withdrawals, at least 100 investors filed complaints against Haru Invest and Delio, a depository firm that had invested in Haru Invest. These investors accused the executives of fraud under the Specific Economic Crimes Act. Local authorities have been investigating both companies since the withdrawals were halted.
Hot Take: Haru Invest’s Downfall Highlights Investor Risks
The arrest of top executives at Haru Invest serves as a reminder of the potential risks associated with investing in the crypto market. Deceptive practices and fraudulent schemes can result in significant financial losses for unsuspecting investors. It is crucial for individuals to exercise caution, conduct thorough research, and seek reputable platforms when entering the world of cryptocurrencies. Regulatory bodies and law enforcement agencies play a vital role in investigating and prosecuting such cases to protect investors and maintain the integrity of the crypto industry.
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