EddieJayonCrypto
21 Jun 25
A South Korean court acquitted Haru Invest CEO Lee Hyung-soo and two co-CEOs of fraud charges related to the loss of about $650 million in cryptocurrency, ruling that negligence did not amount to criminal deception. The court found that the executives genuinely believed in the business's sustainabil...
A South Korean court acquitted Haru Invest CEO Lee Hyung-soo and two co-CEOs of fraud charges related to a $650 million cryptocurrency loss. The court ruled that while there was negligence, it did not amount to criminal deception. The presiding judge emphasized that the executives genuinely believed in the sustainability of their business and that external factors, including the collapse of FTX, played a significant role in the firm's downfall.
Although the CEO and his co-CEOs were found not guilty of fraud, COO Kang Mo was convicted of embezzlement, receiving a suspended two-year prison sentence along with probation and community service. The ruling highlighted the accused's efforts to recover and redistribute assets to customers after withdrawals were suspended in June 2023, a move that triggered panic and led to investigations and asset seizures.
The court acknowledged that the executives had personally invested substantial amounts into the company and operated a market-neutral strategy that was undermined by external circumstances. It also noted that misleading information originated from an external fund manager, which contributed to the collapse. Despite criticism of the company’s oversight, the court found no proof of criminal fraud, concluding that negligence fell short of criminal intent.
This case highlights the complexities involved when external market shocks impact crypto firms and the challenges courts face in distinguishing between poor management and criminal conduct. The Haru Invest saga culminated in bankruptcy in November 2024, closing a turbulent chapter in South Korea’s crypto industry.