Haru Invest South Korea AI High-Frequency Stablecoin Investment Scandal: Withdrawals Frozen in 2023, Over $650 Million Involved

Who Gets Targeted

Victims are primarily retail crypto investors and white-collar workers aged 25 to 45 with some investment experience, as well as Web3 newcomers who trusted the 'AI investment' narrative and middle-class families seeking stable cash flow. Many lowered their guard due to bull market gains and the 'passive income' experience of daily compounding, investing portions of their savings—or even retirement funds—in USDT, USDC, and Bitcoin, psychologically dependent on the illusion of certainty provided by 'institutional backing + high returns.' After the platform suddenly suspended withdrawals, many were trapped in a long, grueling process of 'hoping for recovery—forced to accept bankruptcy—participating in creditor claims.' Due to high cross-border litigation costs, language barriers, and fragmented evidence, most ultimately had to accept liquidation payouts significantly diluted by legal and audit fees.

骗局怎么运作

• Narrative Packaging (Founded in 2019): The platform claimed its headquarters were in Seoul with operations registered in Singapore. It marketed itself as utilizing 'market-neutral' strategies, such as AI high-frequency trading and futures hedging, to provide 12% to 25% annualized returns on Bitcoin, Ethereum, and stablecoins like USDT. It supported daily compounding and flexible lock-up periods, emphasizing 'risk-free diversified investment technology' and building a 'professional quantitative institution' image by citing over $2 billion in cumulative trading volume and 80,000+ users across 140 countries.
• Product Hook Design: The platform packaged the entry threshold as 'stable wealth management' rather than a gamble. It used stablecoin deposits to eliminate concerns about price volatility, then used daily compounding, flexible lock-ups, and referral commissions to incentivize existing users to recruit others and reinvest. Customer service and community messaging repeatedly reiterated that 'high returns come from AI automated trading, unrelated to market fluctuations,' leading users to view their principal as a deposit rather than a high-risk investment, thereby discouraging them from verifying underlying assets and counterparties.
• Misappropriation of Funds and 'Ponzi' Structure: Investigations by the Seoul Southern District Prosecutors' Office's Joint Investigation Team on Virtual Asset Crimes revealed that the platform did not perform diversified investments as advertised. Instead, it concentrated the vast majority of client funds with a single operator, B&S Holdings (formerly Aventus). This operator had been in financial distress since 2019, and the platform had long relied on new user funds to pay returns to existing users, exhibiting a classic Ponzi scheme structure.
• External Crisis Trigger: Some funds were indirectly exposed to FTX-related risks through B&S. The 2022 FTX collapse triggered a chain reaction of liquidity crises. On June 13, 2023, the platform suddenly announced the suspension of all deposits and withdrawals, blaming B&S for 'providing false management reports' without offering a recovery timeline. On the same day, South Korean exchanges like Upbit restricted related withdrawals, the Seoul office was vacated, and employees left for their own safety.
• Passing the Buck, Delays, and Judicial Proceedings: During the suspension, the platform deleted its LinkedIn page and closed its office, leaving users with no recourse. In February 2024, prosecutors arrested two co-CEOs and other executives. In August of the same year, an extreme incident occurred where an investor stabbed the CEO in court. In November 2024, the Seoul Rehabilitation Court declared the related operating company bankrupt, and user funds entered a long liquidation process, with payouts significantly reduced by legal and audit fees.
• Criminal Classification and Reality of Compensation: In June 2025, the Seoul Southern District Court ruled in the first instance that fraud charges were not established, attributing the collapse primarily to the FTX chain reaction and external operator fraud. Only one COO received a suspended sentence for embezzlement, and prosecutors, who had sought a maximum 23-year sentence, filed an appeal. Criminal accountability for victims has largely failed, leaving them to seek recovery through bankruptcy creditor claims and civil litigation, with some debt platforms exploiting the situation by buying up claims at a discount through 'claim transfer' services.

红旗信号（看到这些快跑）

• 🚩 Risk-free High-yield Claims: Crypto investment products promising 'principal protection + 12%+ annualized returns' while claiming to be 'unrelated to the market' offer yields far exceeding risk-free rates, which is inconsistent with the return distribution of genuine quantitative strategies.
• 🚩 Opaque 'Black Box' Strategies: The platform promoted 'AI high-frequency/futures hedging' concepts without disclosing specific strategy parameters, custodians, or independent audit reports, making it impossible for users to verify the actual destination of funds or underlying assets.
• 🚩 Cross-border Registration Structure: The team was based in South Korea while the entity was registered offshore, creating obstacles for cross-border recovery and leaving no single, clear licensed regulator to hold accountable.
• 🚩 Concentration of a Single Counterparty: Funds were concentrated with a single operator (B&S Holdings) without disclosure to users; once that counterparty faced issues, the entire platform collapsed immediately.
• 🚩 Abnormal Crisis Response: Sudden 'suspension of withdrawals' without warning, deletion of social media accounts, closing of offices, and blaming third parties in announcements are typical behavioral patterns preceding a liquidity collapse or 'rug pull.'
• 🚩 Obvious Ponzi Structure: Daily compounding, flexible lock-up periods, and referral incentives to encourage reinvestment, combined with promised returns far exceeding the actual generation capacity of underlying assets, indicate a reliance on new capital to sustain the scheme.

真实案例

• On June 13, 2023, the day deposits and withdrawals were suspended, the South Korean exchange Upbit restricted withdrawals from Haru Invest. The platform's Seoul office was subsequently vacated, employees left for their own safety, and the LinkedIn page was deleted (reported by CoinDesk and Baijiahao citing local media).
• In August 2024, during a court hearing in Seoul, an investor whose funds were frozen lost control due to the lack of progress in recovering their money and attacked the then-CEO with a weapon, causing neck injuries. The attacker subsequently faced criminal charges carrying up to 10 years in prison (reported by FinanceFeeds).
• Between June 2023 and 2024, Haru Invest was accused by South Korean prosecutors of using the promise of 16% high returns as bait to misappropriate client assets since March 2020, resulting in losses of approximately 1.4 trillion KRW and affecting about 16,000 investors. Three company executives were arrested in February 2024 on suspicion of misappropriating client assets. (Source: https://financefeeds.com/man-who-stabbed-haru-invest-ceo-faces-10-year-prison-term-after-court-hearing/)
• On June 13, 2023, the South Korean crypto yield platform Haru Invest suspended all deposit and withdrawal requests until further notice, citing issues with a service partner. The company had previously invested $18 million in the Canadian mining firm Pow.re. On the same day, the South Korean exchange Upbit announced it would restrict the platform's ability to process withdrawals on its site, as reported by CoinDesk. (Source: https://www.coindesk.com/markets/2023/06/13/south-korean-crypto-yield-platform-haru-invest-pauses-withdrawals-and-deposits)

Official Stance

• Since 2023, the Financial Supervisory Service (FSS) of South Korea has repeatedly issued general warnings: be wary of crypto and quasi-bank investment products that promise 'principal protection + high returns.' Such products are often illegal fundraising or high-risk scams, especially those involving AI and automated trading promotions (cited by Asia Economy).
• The Joint Investigation Team on Virtual Asset Crimes of the Seoul Southern District Prosecutors' Office arrested three executives, including the co-CEOs, in February 2024 and indicted them on charges of fraud and misappropriation of client funds (reported by Decrypt and TRM Labs).
• On November 20, 2024, the 14th Bankruptcy Division of the Seoul Rehabilitation Court declared the bankruptcy of Haru Invest's related operating and custodial companies, appointed a bankruptcy trustee, and held the first creditors' meeting on February 11, 2025 (reported by Newsis and Foresight News).
• On June 17, 2025, the Seoul Southern District Court issued a first-instance criminal judgment, dismissing fraud charges and handing down suspended sentences to executives found guilty of embezzlement, highlighting that criminal accountability is limited and civil recovery must rely on bankruptcy proceedings (reported by The Block).

How to Protect Yourself

• ✅ Perform a 'Reasonableness Test' on returns when faced with 'AI Quant + Stablecoin High-Yield' marketing: Fixed-income products promising over 12% annualized returns while claiming to be 'risk-free' almost certainly involve a fund pool or Ponzi structure; treat this as a red line for non-participation.
• ✅ Verify Entity Qualifications and Fund Flows: Require the platform to provide licensed registration numbers, proof of independent custodial banks or qualified custodians, and audited reserve reports. Cross-verify these against official regulatory directories; if they cannot be verified, treat the marketing as invalid.
• ✅ Diversification and Isolation Principle: Even when participating in crypto investments, only invest amounts you can afford to lose. Do not use borrowed funds, do not put all your savings into a single platform, and maintain a complete chain of evidence, including deposit addresses, transaction records, and screenshots of customer service promises.
• ✅ Monitor Risk Signals and Official Announcements: Regularly check the FSS risk alerts and court bankruptcy announcements. If signals such as withdrawal abnormalities, deleted social media accounts, or office closures appear, attempt small-amount withdrawals immediately and stop adding funds.
• ✅ Maintain Cross-border Legal Recourse Paths: When the involved entity is overseas, file creditor claims through the country's bankruptcy trustee. Keep evidence in both English and Korean, hire local counsel if necessary, and be wary of secondary scams involving 'paid recovery' services.