Haru Invest Declared Bankrupt Following $1 Billion Fraud Scheme
Haru Invest, a South Korean crypto yield platform accused of defrauding over 16,000 investors, has been declared bankrupt by the Seoul Rehabilitation Court.
The platform, operating under Haru Management Limited, collapsed in June 2023 after freezing withdrawals, resulting in significant financial distress for its investors. This shutdown revealed a fraudulent scheme that investigators later uncovered.
Promises that Crumbled
Registered in the British Virgin Islands, Haru Management Limited primarily operated in South Korea, attracting investors with claims of safe investments and high returns on crypto deposits. Many investors committed their life savings based on these promises.
However, the platform failed to deliver promised double-digit yields, leading to its abrupt closure. Following this, Haru Invest laid off over 100 employees, citing issues with service partners.
In February 2024, South Korean authorities arrested several top executives, including CEO Hugo Hyungsoo Lee, on fraud and money laundering charges. Prosecutors alleged that the company misappropriated investor funds from March 2020 to June 2023, contradicting its claims of offering “risk-free, diversified investment strategies.” Investigators identified a fraud amounting to 1.4 trillion won (approximately $1 billion) taken from investors.
The arrests aimed to hold those responsible accountable and recover stolen assets; however, many investors remain doubtful about substantial restitution.
The situation intensified in August 2024 when Hyungsoo Lee was stabbed multiple times by an agitated investor during his trial.
Bankruptcy Proceedings Offer a Path to Recovery
Following the arrests and trials, the Seoul court declared Haru Invest bankrupt, initiating asset liquidation to recover some defrauded funds.
A creditors’ meeting is scheduled for February 11, 2025, where a bankruptcy administrator will evaluate Haru Management’s finances and manage the liquidation process. Unlike criminal cases with limited recovery options, bankruptcy proceedings allow trustees to seize and distribute the company's remaining accounts, cryptocurrencies, and other assets. While full recovery is uncertain, investors view this as a potential opportunity for financial restoration.