Seoul Court Clears Haru Invest CEO in Stunning $650M Fraud Case Dismissal

Justice served or loophole exploited? Seoul''s District Court just dropped a bombshell acquittal in one of crypto''s most-watched fraud cases.

Haru''s $650M miracle

The ruling sends shockwaves through Korea''s fintech scene—prosecutors alleged textbook Ponzi scheme mechanics, but the court saw insufficient evidence. Observers note the CEO''s legal team successfully argued operational losses rather than criminal intent.

Meanwhile, retail investors left holding the bag are screaming foul play. ''This sets dangerous precedent,'' tweeted one blockchain analyst. ''Next time your yield platform implodes, just call it reckless management instead of fraud.''

The verdict lands as Korean regulators scramble to draft stricter digital asset laws—too late for those who bet big on Haru''s ''too-good-to-be-true'' 12% APY promises. Lesson learned? In crypto, the house always wins... except when it''s acquitted.

TLDR

• The Seoul Southern District Court acquitted Haru Invest CEO Lee Hyung-soo of $650 million fraud and embezzlement charges.
• The court ruled that Haru Invest’s collapse was caused by market shocks and not by criminal intent or fraudulent activity.
• Prosecutors had sought a 23-year sentence for Lee but the court found no evidence of deception or false business claims.
• Haru Invest’s business model was declared legitimate and not similar to Ponzi schemes or scams with fabricated returns.
• Co-CEOs Park and Song of BlockCrafters were also cleared of all fraud charges in the same ruling.

A South Korean court has acquitted Lee Hyung-soo, CEO of Haru Invest, of criminal fraud and embezzlement involving $650 million. The Seoul Southern District Court issued the ruling after a year-long trial concerning Haru Invest’s suspension of operations in 2023. Prosecutors accused the company of deceiving investors, but the court found no evidence of criminal intent.

The court determined that Haru Invest’s business practices, though flawed, did not constitute fraud under South Korean criminal law. Instead, the judges attributed the firm’s collapse to severe market disruptions triggered by external crypto sector failures. As a result, the court concluded that Lee and other executives were not criminally liable for investor losses.

This decision ended the criminal case but opened the possibility of civil lawsuits from affected investors. Haru Invest had operated as a digital asset platform promising high returns, which drew scrutiny after halting withdrawals. The court emphasized that legal negligence differs from criminal fraud and found no intent to deceive.

Court Dismisses Charges Against Haru Invest CEO Lee Hyung-soo

Prosecutors originally accused Lee of orchestrating a scheme that affected more than 16,000 investors through Haru Invest. They claimed the company had misused approximately 1.39 trillion won by promising unrealistic returns. The court rejected this argument, noting that Lee’s actions did not meet the criteria for deliberate fraud.

The judges acknowledged that Haru Invest’s operations were affected by global events like the collapse of FTX and a wider liquidity crisis. These market shifts weakened Haru Invest’s ability to fulfill customer withdrawal requests, ultimately leading to the platform’s shutdown. The ruling found that the company’s decisions responded to market conditions rather than fraud.

The court also evaluated how Haru Invest generated profits and used client funds. It found no fabricated assets or returns and stated that the business differed from classic Ponzi schemes. Haru Invest’s model was based on legitimate digital asset investments and market activity.

Other Executives Also Found Not Guilty of Fraud

In addition to Lee, the court acquitted two other executives from BlockCrafters, Haru Invest’s parent company. Known only by their given names, Park and Song, they faced similar allegations but were cleared of wrongdoing. The court found no indication that either executive had committed fraud or misled investors.

The judgment noted that all executives acted in response to financial pressures rather than with fraudulent intent. The ruling emphasized that failure in business operations does not always imply criminal conduct. Haru Invest’s collapse was not planned or deceitful, the court concluded.

The case had drawn significant attention due to the large number of investors affected and the size of the alleged fraud. During an earlier hearing, Lee survived a stabbing by an investor who claimed heavy losses. The court confirmed that this violent act had no bearing on its legal findings.

Civil Cases and Bankruptcy Proceedings Continue

Although the court dismissed criminal charges, it clarified that civil litigation may proceed. Investors can still seek compensation through Haru Invest’s ongoing bankruptcy process. The court ruling does not interfere with victims’ rights to file claims.

Haru Invest’s legal team stated that restructuring efforts and asset recovery are still underway. Lee had previously expressed a commitment to repaying affected investors as the bankruptcy case unfolded. However, many users remain frustrated by the delay and lack of updates.

The ruling marks a rare judicial acknowledgment of the difference between failed business models and intentional scams. Haru Invest remains at the center of legal and financial scrutiny as civil proceedings MOVE forward.