Haru Invest Reveals Asset Recovery Strategy
After filing for bankruptcy in July due to suspected fraud involving a consignment operator, Haru Invest, a South Korean yield platform, has outlined its plan for asset recovery and returning funds to its users. However, the company did not provide a specific timeline for this process. In a recent community update session, CEO Hugo Lee explained that the recovery and distribution of assets would occur in phases through the management of reclaimed assets.
“[…] legal procedures including rehabilitation and cooperation with investigative agencies are still underway, we are essentially unable to distribute the assets on our own. Hence, predicting and telling you the asset distribution schedule is impossible at this time.” Lee said.
In addition, Lee assured investors that an impartial distribution scheme would be used to ensure fair treatment. This approach deviates from the usual practice of prioritizing local creditors in South Korea. It is worth noting that about 60% of Haru Invest’s users are based outside of South Korea.
“Recently, we have discovered through our internal inspection process that certain information provided by a consignment operator was suspected to be false. After careful investigation, we concluded that immediate suspension of transactions was necessary to protect our investors.” the firm said in a statement.
The troubles for Haru Invest began in June when it halted all deposit and withdrawal operations due to suspicious activities linked to consignment operator B&S Holdings. As a result, the company was forced to file for bankruptcy. This crisis also affected Delio, another crypto lender, which suspended deposit and withdrawal activities and held assets worth $1 billion in Bitcoin (BTC) and $200 million in Ether (ETH).
At the time of the bankruptcy declaration, Haru Invest had over 80,000 members and had disbursed 9.8 million crypto-earn payouts. It had recorded a total of $2.27 billion in transactions prior to the declaration. Earlier, Haru Invest had successfully raised $4 million in funding with a valuation of $284 million by aggressively marketing an annual yield of 12% on most of its earn products in September 2022.
Hot Take: Haru Invest Faces Challenges, But Promises Asset Recovery
Haru Invest, the South Korean yield platform that filed for bankruptcy due to suspected fraud, has revealed its strategy for asset recovery and returning funds to investors. While a definite timeline has not been provided, CEO Hugo Lee assured users that a phased recovery and distribution program is being planned. The company aims to manage reclaimed assets and ensure an impartial distribution scheme.
This approach sets Haru Invest apart from other South Korean creditors who typically prioritize local investors. The troubles began when suspicious activities involving consignment operator B&S Holdings were discovered, leading to the suspension of transactions and ultimately the bankruptcy filing. Despite the challenges, Haru Invest had previously achieved significant success and raised millions in funding.
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