Seoul court declares Haru Invest bankrupt following a $1 billion crypto fraud, affecting 16,000 investors and raising regulatory concerns.
The Seoul Rehabilitation Court has declared Haru Invest bankrupt after the company was implicated in a major crypto fraud worth up to $1 billion. On November 20, the court ruled on the case involving Haru Management Limited, the operator behind Haru Invest.
Crypto yield platform named Haru Invest lured customers into investing in virtual assets including Bitcoin, Ethereum, and Tether. The company said that there were high returns, and that it would ensure that the principal sums were paid back. However, in June of last year, it stopped withdrawals suddenly and performed a so-called ‘rug pull,’ leaving investors in a deep financial dilemma. The Seoul court said that even though Haru Management is based in the British Virgin Islands, this matter is within the jurisdiction of South Korea.
Haru Invest Faces Bankruptcy Amidst $1 Billion Debt and Allegations of Fraud
Haru Invest has a total of 1.4 trillion Korean won which is approximately one billion US Dollars in debt. The court also pointed out that it was impossible to make repayments considering its financial state. Therefore, the court set the first creditors’ meeting for February 11, 2025, to review its financial position.
It may be noted that Haru Invest has been accused of fraud for the past year 2023. The platform promised very high returns and received money deposits from investors. However, when the company ceased its withdrawal, about 16000 investors lost a huge amount of the cryptocurrency.
The Seoul court has declared Haru Invest bankrupt after a $1 billion crypto fraud, affecting 16,000 investors. As a result, the company faces mounting legal and regulatory challenges after its collapse. Most victims feel that the best way to regain their losses is by filing for bankruptcy. They expect the process will help a trustee recognize and take control of an asset to facilitate cash distribution to creditors.
However, the identification of the digital assets is challenging. Cryptocurrencies are almost impossible to track, and this might complicate the process of confiscating them. People still believe that there is still hope to find assets in the bankruptcy process as civil litigation may not work if the operator is not willing to declare his assets.
This is evident following the collapse of the Haru Invest which was a centralized finance platform. It also brings into focus that what is lacking in the burgeoning crypto market is better regulation.
