Haru Invest CEO Acquitted of 880.5 Billion Won Fraud Charges, Clear of Allegations

Haru Invest CEO Lee Hyung-soo Acquitted of Fraud Charges

According to reports from The Block, Lee Hyung-soo, the CEO of the South Korean cryptocurrency yield platform Haru Invest, was acquitted of fraud charges on Tuesday.

Haru Invest had attracted user deposits through high-yield products, but in June 2023, it suspended user withdrawals and closed its offices, leading to dissatisfaction among multiple investors. Subsequently, Haru came under investigation by South Korean authorities, and three senior officials, including the CEO, were charged with fraud.

Local media reported that prosecutors initially claimed Haru had stolen 1.39 trillion Korean won (approximately 30 billion New Taiwan dollars) from 16,000 investors. However, in subsequent indictments, the number of victims was reduced to about 6,000, with the amount involved decreased to 880.5 billion won (approximately 19 billion New Taiwan dollars), and a 23-year prison sentence was sought for CEO Lee Hyung-soo.

According to Digital Asset, the Seoul Southern District Court ruled on Tuesday that although Lee’s management exhibited significant negligence, his actions did not meet the legal standards for fraud as defined by criminal law. More specifically, the court determined that Haru’s sudden suspension of the platform’s withdrawal function was primarily related to the overall liquidity crisis triggered by the bankruptcy of the FTX exchange, supporting Lee’s defense that Haru was operating a legitimate business model with real profits, unlike other fraud cases.

In addition to Lee, Haru’s parent company Blockcrafters’ co-CEOs Park and Song were also acquitted. Meanwhile, the company’s COO Kang was found not guilty of fraud but was sentenced to two years in prison for misappropriation of funds.

At the same time, the court noted that this ruling only absolved the defendants of criminal liability and did not exempt them from civil liability to the victims. Lee previously stated that he was working to recover losses through bankruptcy proceedings.