Haru Invest, a South Korean digital asset management company, has suspended withdrawals from its system due to an issue with one of its service partners. The decision was made to protect customer funds while a contingency plan was developed. Haru Invest, a company known for offering attractive dividend rates, has faced controversy and speculation surrounding its financial situation and past mergers.
Controversy surrounds South Korean asset management firm Haru Invest
A South Korean company called Haru Invest, which manages digital assets, has banned withdrawals from its system due to an issue with one of the service partners.
In an announcement on June 13, the company stated that the suspension was a difficult decision to protect customer funds until a contingency plan could be devised to address the situation.
Haru, a platform offering annual dividends on Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Circle (USDC), and XRP (XRP), boasts a user base of over 80,000 customers across 140 countries. With approximately $1 billion in assets under its management, Haru continues providing attractive dividend rates ranging from 12% to 25%, per an April 18 update.
According to the reports, Haru Invest declined to identify the partner affecting its business. The company’s Twitter account is still active. However, its Linkedin Page has been removed.
According to reports from S.Korea, the South Korean exchange Upbit announced that it would restrict Haru Invest’s ability to withdraw funds from its system. According to company CEO Hyung-soo ‘Hugo,’ Lee, Haru Invest’s headquarters in Seoul is empty since staff members are working from home for their safety.
Co-founder and former CTO of Haru Invest Eunkwang Joo stated in a tweet thread that although the company may have experienced an “internal situation,” a purposeful rug pull was improbable.
According to Joo, deleting social media accounts was a legal response to an ambiguous circumstance. This could be a reaction to the regulator’s actions in South Korea. Previously, Haru had contributed $18 million to the miner Pow.re with headquarters in Montreal.
Speculation on Haru Invest’s financial situation and past controversial mergers
According to a report from Koreapostenglish, following the introduction of a “lug pull” scenario, the virtual asset management firm Haru Invest is embroiled in controversy. The office of Block Crafters, a subsidiary of Haru Invest, in Gangnam, Seoul, was reported to have a “no entry” notice posted on the 13th, and all staff was reported to have left their places of employment the previous morning.
A virtual asset investment firm, Haru Invest, asserted that investing in DeFi (decentralized finance) is profitable for people and organizations. It used to provide a 12% annual rate of return, but investors have criticized it since last year for careless influencer marketing and deceptive advertising.
Around 9:40 am on the same day, Haru Invest side’s social media communication channels (Twitter, Medium) were shut off, and the “eating and running” dispute started. The statement from Haru Invest was:
We found a problem with one of our service partners and decided to stop deposit and withdrawal requests starting from June 13 at 9:40 am (Korean time).
Haru
In response, some investors went to Haru Invest’s parent firm, Block Crafters, but claimed to have merely looked at the “no entry” sign. The two businesses are in Yeoksam-dong, Gangnam-gu, and Seoul’s Daeryung Gangnam Tower.
Additionally, some investors claim it is similar to the merging point, which generated controversy a few years ago. It’s possible that Haru Invest lost money and finally went out of business after luring investors and capital with an unrealistic rate of return (profit) before investing in DeFi.
Since June of last year, these rumors have been discussed among investors. Another theory holds that a bank run happened due to a spike in withdrawal requests following the deposit lock-up term of one year that was intended at the time.
At the moment, Haru Invest is reportedly deleting social media traces. CEO of Haru Invest, Hyung-soo Lee, is removing his career from LinkedIn, a forum for IT professionals. Joo, the company’s chief technology officer (CTO), quit in August of the previous year. However, for some reason, the Twitter account was activated again as worries grew following the announcement on the morning of the same day that HaruInvest’s Medium and Twitter accounts would be deleted.
