South Korean court acquits Haru Invest CEO of fraud

A South Korean court on Tuesday acquitted Haru Invest CEO Lee Hyung-soo of fraud charges, related to the company's sudden suspension of withdrawals in June 2023 and its office shutdown, which affected thousands of investors.

Initially, prosecutors claimed the company stole 1.39 trillion won ($1.02 billion) from 16,000 investors, but later reduced the figure to 880.5 billion won ($650 million) from around 6,000 investors.

The Seoul Southern District Court ruled that Lee’s actions did not meet the criminal threshold for fraud, although it acknowledged serious managerial negligence. The court also noted that the liquidity crisis was primarily triggered by the FTX collapse and supported Lee's claim that Haru had a legitimate and profitable business model.

In a dramatic incident last August, Lee was stabbed in the neck four times by a man who had allegedly lost 100 BTC with Haru. The attacker was sentenced to five years in prison this April.

Park and Song, the co-CEOs of Haru’s parent firm Blockcrafters, were also acquitted. Kang, the company’s COO, was found guilty of embezzlement and sentenced to two years in prison.

The court emphasized the ruling only clears the defendants of criminal liability; civil liabilities to victims remain. Lee has said he is working on damage recovery through bankruptcy proceedings.