Top executives of Haru Invest, a South Korean crypto yield platform, have been arrested by the county’s prosecutors on Monday.
The crypto investigation arm of the Seoul Southern District Prosecutors’ Office have arrested three people in connection with crypto fraud worth 1 trillion Won ($752 million).
Per the prosecutors’ charges, the three accused, including the CEO of Haru Invest, allegedly laundered 1 trillion worth consumer assets. According to Yonhap reports, the Haru Invest platform operators deceived deposits of around 1,600 customers.
Investigations further revealed that the company misrepresented its risks to customers by falsely advertising up to 12% yield returns. Their promotions contained wordings like “operating stably using risk-free diversified investment techniques.”
“It was found that they invested most of the coins deposited from customers from March 2020 to June 2023,” the report read.
Haru Invest’s ‘Rug Pull’ Revealed
Amassing investors’ funds, the platform announced in June 2023 that it is suspending deposit and withdrawal requests until further notice.
Haru Invest wrote at the time, “Recently, we have come across a certain issue with one of the service partners we have worked with.”
The company notified customers that it is undergoing rehabilitation procedures. However, it closed the office in Gangnam-gu, Seoul soon after the suspension, surprising users.
Delio, a depository firm that invested in Haru Invest, abruptly stopped withdrawals the next day, sparking controversy over a ‘rug-pull’.
Rug-pull is one common scam in the crypto space, where creators promotes a project and later disappear with investor funds. The perpetrators of rug-pull are difficult to track, as the decentralized nature of blockchain allows them to conceal their identities.
As a result, at least 100 investors filed a complaint with the South Korean prosecutors against the executives of the two companies on fraud under the Specific Economic Crimes Act. Local authorities noted that they have been investigating both Haru Invest and Delio after they suspended their withdrawals.
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