A South Korean court has acquitted Haru Invest CEO Lee Hyung-soo of $650 million fraud charges, months after surviving a brutal stabbing during his trial. The case, which gripped the nation’s crypto scene, saw Hyung-soo walk free despite allegations of massive investor losses.
Haru Invest’s CEO is Discharged and Acquitted
Haru Invest, a crypto investment platform, reportedly shocked users in 2023 by abruptly halting withdrawals, leaving thousands of investors in the lurch. Prosecutors initially accused Lee of defrauding 16,000 investors of $1.02 billion, later revising the figure to $650 million from 6,000 investors. They claimed the Haru Invest CEO ran a Ponzi scheme, deliberately misleading clients to pocket their funds, and sought a 23-year prison sentence.
The Seoul Southern District Court, however, ruled today that Hyung-soo did not intentionally deceive investors. The court linked Haru’s collapse to liquidity issues, rather than fraud, thereby sparing the CEO from conviction. The case took a violent turn in August 2024 when a disgruntled investor, Kang, stabbed the Haru Invest CEO in the neck during a hearing, enraged over losing 100 BTC worth $8.3 million in Haru’s meltdown.
FTX’s Role in Haru Invest’s Collapse
The court cited the 2022 collapse of FTX, a global cryptocurrency exchange, as a key factor contributing to Haru’s financial woes. FTX’s bankruptcy caused a ripple effect, drying up liquidity across the crypto market, which Haru struggled to navigate. This external shock, the court argued, was not a deliberate scheme, led to Haru’s withdrawal freeze.
Alongside Lee, Park, and Song, co-CEOs of Haru’s parent company, Blockcrafters, were also acquitted of fraud charges. However, Kang, Haru’s chief operating officer—not the attacker—faced a different fate. While cleared of fraud, he was convicted of embezzlement and sentenced to two years in prison. The acquittals have sparked debate, with some investors feeling justice was not served.
Lee Hyung-soo, now cleared of fraud, continues to recover from the near-fatal courtroom attack, with no life-threatening injuries reported. As South Korea’s crypto market pushes for legitimacy under new leadership, Lee’s acquittal highlights the fine line between market chaos and criminal intent.
