FTX Fallout Echoes as South Korean Court Clears Haru Invest CEO in $650M Crypto Case

In a landmark ruling, a Seoul court has acquitted Haru Invest CEO Lee Hyung-soo of criminal fraud charges related to $650 million in alleged investor losses. The case, which drew parallels to the FTX collapse, concluded with the court finding insufficient evidence of criminal intent despite prosecutors' claims of misleading 6,000 investors with promises of 25% annual returns. This decision marks a significant moment in crypto jurisprudence as regulators worldwide grapple with balancing investor protection and innovation in the digital asset space.

South Korean Court Acquits Haru Invest CEO in $650M Crypto Fraud Case

A Seoul court has cleared Haru Invest CEO Lee Hyung-soo of criminal fraud charges tied to $650 million in alleged investor losses. The ruling concludes a high-profile case that began when the crypto yield platform froze withdrawals amid 2023's market turmoil.

Prosecutors failed to prove criminal intent despite accusing Lee of misleading 6,000 investors with promises of 25% annual returns. The judgment noted external factors like FTX's collapse contributed to the firm's downfall, distinguishing mismanagement from deliberate fraud.

The acquittal contrasts with prosecutors' initial demand for a 23-year sentence. It underscores the legal challenges in distinguishing failed crypto ventures from intentional scams, particularly during periods of extreme market volatility.

Analyst Warns of Potential Historic Collapse for Strategy, Bigger Than FTX

On-chain analyst OxChain has issued a stark warning about Strategy (formerly MicroStrategy), suggesting its aggressive Bitcoin accumulation tactics could lead to a collapse surpassing FTX's infamous downfall. The firm's transformation from a software company to a major Bitcoin holder—with 582,000 BTC worth $61 billion—has raised eyebrows.

OxChain likens Strategy's financial model to a Ponzi scheme, citing reliance on leverage, debt, and shareholder dilution. The analyst describes a cyclical pattern: raising capital through shares or bonds, buying Bitcoin, announcing purchases to inflate stock prices, and repeating the process. This strategy hinges on Bitcoin's price appreciation, but a planned $1 billion share sale may heighten risk exposure.

Liquidation risks loom if Bitcoin's price falters, potentially triggering a cascade of forced sell-offs. The warning underscores the fragility of corporate crypto strategies built on speculative leverage rather than organic conviction.