Highlights:
- A Seoul Rehabilitation Court has declared South Korea’s Haru Invest bankrupt after the over $1 billion investment scam scandal.
- The court revealed that the creditors’ first meeting will kick off on February 11, 2025.
- 2025’s meeting outcome will determine how fast the reimbursement procedures will proceed.
According to local media in South Korea, a Seoul Rehabilitation Court has declared Haru Invest, a crypto yield investment firm, bankrupt. The court declaration followed legal procedures and investigations, which revealed that Haru Invest involved itself in an over $1 billion scandal.
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For context, Haru Invest operates as a Centralised Finance (CeFi) outlet that provides yields on investors’ funds. Notedly, traders’ investments stem from crypto deposits, which include Bitcoin (BTC), Ethereum (ETH), Tether (USDT), etc.
In the report, Haru Management Limited, the entity in charge of the crypto yield firm, absconded with its over 10,000 customers funds when it suddenly halted withdrawals, preventing users from accessing 1.4 trillion won ($1,002,197,840) in investment yields.
JUST IN: 🇰🇷 South Korean crypto yield platform Haru Invest, involved in a $1B fraud case, has been declared bankrupt. 📉 #HaruInvest
— Breaking Whale (@BreakingWhale) November 20, 2024
It is worth noting that Haru Invest is a British Virgin Islands establishment. However, because it expanded its operations to the Asian nation, it became liable to South Korea’s domestic court ruling, particularly when the unfortunate events revolving around the platform affected South Koreans.
What Transpired Between Haru Invest and its Creditors
During its early days, Haru Invest projected itself as a trusted investment platform that offers users high investment yields. According to reputable sources, the CeFi firm opened a coin deposit window between March 2020 and June 2023.
Within the timeframe above, Haru Invest expected users to invest their funds. Because of the juicy profits return, traders hopped into the investment with massive fundings that amounted to over $1 billion.
However, contrary to its initial promise, Haru Invest suddenly stopped withdrawals last year, leaving approximately 16,000 creditors stranded. Predicting what might likely befall them, investors opted to file for corporate rehabilitation proceedings in June 2023.
However, the court did not consider corporate rehabilitation filing sacrosanct. Hence, it rejected the filing, resulting in a bankruptcy application earlier this year, in April. The filing in April led to the recent bankruptcy declaration by the court, having thoroughly investigated to ascertain the authenticity of the claims.
Future Steps and Creditors Reimbursement Plans
After a bankruptcy declaration by the court, confiscating the affected platform assets, including cryptocurrencies, bonds, and accounts, becomes the subsequent step. Such measures make it easier for the bankruptcy trustee to decipher how and when to plan investors’ repayments.
In the Haru Invest case, cryptocurrencies are a significant part of the investment platform’s assets. Therefore, because of the blockchain’s anonymity, it becomes difficult to track the CeFi platform’s cash flows via digital tokens. The investigative body will work based on the Haru Invest report on digital assets holdings and other transacted coins.
Meanwhile, the court has scheduled the first creditors’ meeting for February 11, 2025. The meeting will begin the assessment of Haru Invet’s financial standings based on reports from the bankruptcy trustee.
Haru Invest, a South Korean digital asset platform, has been declared bankrupt after allegedly defrauding investors of $1 billion. The Seoul Bankruptcy Court set a creditors' meeting for February 11, 2025, to assess and distribute the company’s assets. The case underscores…
— BitcoinWorld Media (@ItsBitcoinWorld) November 20, 2024
The above statement implies that the bankruptcy board is working closely with Haru Management Limited to gather every relevant document before February next year. Moreover, the reimbursement process will remain on hold pending the financial status assessment.
If events proceed with minimal setbacks, chances abound that the reimbursement procedures might likely begin in 2025. However, creditors could experience longer delays before receiving investment funding in escalated outcomes.
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