Bankrupt CeFi firm Haru Invest hints at asset recovery

No specific timeline was given as to when users can receive their money back.

Bankrupt South Korean yield platform Haru Invest says it will return users’ assets, although no particular timeframe is given.

In a questions and answers session on October 2, Hugo Lee, Haru Invest’s CEO, said the firm has a plan for “phased asset recovery and distribution” in several rounds through the disposition of recovered assets. Lee wrote:

“To note, however, as 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.”

During the session, Lee also assured that investors would receive their money back via an equitable distribution regime, instead of prioritizing creditors in South Korea. An estimated 60% of Haru Invest users are located overseas, compared to 40% in Korea.

In June, Haru Invest suspended all deposits and withdrawals after discovering allegedly fraudulent activities surrounding a consignment operator, B&S Holdings. The firm subsequently filed for bankruptcy. Haru Invest’s collapse also caused contagion among fellow crypto lender Delio, which held $1 billion in Bitcoin (BTC) and $200 million in Ether (ETH), when it, too, suspended deposits and withdrawals in June.

At the time of filing, Haru Invest claimed over 80,000 members, 9.8 million crypto-earn payouts, and $2.27 billion in total transactions. Haru previously targeted an annual yield of 12% on most of its earn products. Last September, it raised $4 million on a $284 million valuation.

In a September 25 update, Haru Invest said that the company is currently being maintained “with a minimum number of operating personnel.” As a result, its website login is no longer functional.