Lee Hyung-soo, the CEO of South Korea-based Haru Invest, has been acquitted of fraud charges related to the abrupt collapse of his crypto investment platform in 2023. The ruling, issued by the Seoul Southern District Court, clears Lee of criminal wrongdoing in a case that allegedly affected over 6,000 investors and involved $650 million in losses.
Withdrawal Suspension Sparked Legal Storm
Haru Invest halted user withdrawals in June 2023, leaving investors unable to access funds. The platform had promised up to 25% annual returns, sparking allegations that it operated as a deceptive high-yield investment scheme.
Initial estimates claimed over $1 billion in losses involving 16,000 victims, but the figure was later revised by prosecutors to 880.5 billion Korean won (approximately $650 million) from around 6,000 affected users.
Court Finds No Criminal Deception
While the prosecution demanded a 23-year prison sentence, the court ruled that Lee’s actions did not meet the legal threshold for criminal fraud. The judge cited the platform’s genuine investment activities and claimed the collapse was influenced by the broader crypto market downturn, particularly after the FTX bankruptcy, which triggered liquidity problems across the industry.
“The defendants’ management was negligent but not intentionally deceptive,” the court stated.
Stabbing Incident During Trial
During the legal proceedings, Lee survived a shocking attack in August 2023, when an investor who allegedly lost 100 BTC in Haru stabbed him four times in the neck. Lee recovered, and the attacker received a five-year prison sentence earlier this year.
Other Executives Acquitted, One Convicted
Two co-CEOs of Haru’s parent company, Blockcrafters, were also acquitted of fraud. However, the company’s chief operating officer was found guilty of embezzlement and sentenced to two years in prison. Their full names remain undisclosed in accordance with South Korean privacy laws.
Civil Liability Remains Unresolved
The court clarified that while the executives have been cleared of criminal charges, civil responsibilities toward affected investors remain. Lee has stated he is committed to recovering losses through ongoing bankruptcy proceedings.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.