After declaring bankruptcy in July due to suspected fraud involving a consignment operator, South Korean yield platform Haru Invest has revealed its strategy for asset recovery and return to its users.
The company, however, refrains from specifying a definite timeline for this process. In a recent community update session, Hugo Lee, Haru Invest's CEO, outlined the firm's intention for a "phased asset recovery and distribution" program. Lee explained that these phases would occur in multiple rounds through the management of reclaimed assets.
" [...] legal procedures including rehabilitation and cooperation with investigative agencies are still underway, we are essentially unable to distribute the assets on our own. Hence, predicting and telling you the asset distribution schedule is impossible at this time.” Lee said.
Lee also assured investors that they would receive their funds through an impartial distribution scheme. This approach diverges from the standard practice of prioritizing local creditors in South Korea. Notably, roughly 60% of Haru Invest users are based outside South Korea, with the remainder residing in the country.
"Recently, we have discovered through our internal inspection process that certain information provided by a consignment operator was suspected to be false. After careful investigation, we concluded that immediate suspension of transactions was necessary to protect our investors." the firm said in a statement.
Haru Invest's troubles began in June when it ceased all deposit and withdrawal operations upon discovering suspicious activities linked to a consignment operator, B&S Holdings. Subsequently, the company was compelled to file for bankruptcy. This crisis also had a ripple effect on Delio, another crypto lender, which suspended deposit and withdrawal activities in June and held assets valued at $1 billion in Bitcoin (BTC) and $200 million in Ether (ETH).
At the time of its bankruptcy declaration, Haru Invest boasted more than 80,000 members, disbursed 9.8 million crypto-earn payouts, with $2.27 billion in total transactions recorded (prior to the declaration). Earlier, Haru Invest had aggressively marketed an annual yield of 12% on most of its earn products, successfully securing $4 million in funding at a valuation of $284 million in September 2022.
Disclaimer: This article is provided for informational purposes only and does not constitute legal, tax, investment, financial, or any other form of advice.
