The Southern District Court of Seoul found Haru Invest’s CEO Hugo Hensu Lee and the company’s management not guilty in a criminal case concerning allegations of fraud and misappropriation of investors’ funds. The arrest of the top executives occurred in February 2024 following suspicions of illegal appropriation of client assets on the platform.
This is reported by Finway
“Although the negligence of the management [of Haru Invest] does not require proof, their actions do not warrant criminal punishment,” the judge concluded.
Court Ruling and Management Accountability
In addition to the CEO, the co-CEOs of the parent company Block Crafters were also acquitted. At the same time, some charges against COO Kana Mo were dropped, but he was sentenced to two years in prison for embezzlement of corporate funds.
The court noted that Haru Invest’s business model did not exhibit signs of fraud, as the platform demonstrated resilience and generated profits. The cause of the company’s financial collapse was attributed to the bankruptcy of the cryptocurrency exchange FTX, while the losses incurred by investors were deemed a result of management negligence rather than malicious intent.
Despite the acquittal in the criminal case, the individuals involved remain civilly liable to the affected investors.
Timeline of Events and Consequences for Haru Invest
Haru Invest halted withdrawals in June 2023, leading to mass layoffs. The management explained the financial difficulties as stemming from issues with operator B&S Holdings. In February 2024, law enforcement detained the company’s management, charging them with misappropriating funds amounting to 1.1 trillion Korean won, which at that time was approximately $826 million, with the number of affected individuals estimated at 16,000.
Subsequently, the charges were revised: the amount of damages was reduced to 880.5 billion won (about $650 million), and the number of claimants was lowered to 6,000. In August 2024, during a court hearing, Hensu Lee was attacked with a knife by one of the alleged affected clients, who claimed to have invested about 100 BTC in the platform. The attacker was sentenced to five years in prison.
Haru Invest is currently in the process of liquidation. According to the law firm Ask Korea Law, the last creditor meetings took place in February 2025, but no information has been provided regarding the distribution of funds thereafter.