In recent news, Haru Invest, a South Korean CeFi firm, filed for bankruptcy after allegations of fraudulent activities with its consignment operator, B&S Holdings. The ordeal of Haru Invest also had an impact on the fellow crypto lender, Delio, which held values equivalent to $1 billion in BTC at the dollar price of $28,346 and $200 million in ETH at the dollar price of $1,717, leading to a suspension of deposits and withdrawals in the month of June.
Despite the firm’s bankruptcy status, Hugo Lee, Haru Invest’s CEO hinted at an asset recovery plan to be implemented in several phases through a Q&A session. However, no specific timeline was offered due to ongoing legal procedures and cooperation with investigative agencies. The resurrection plan aims to return investments to Haru Invest users via an equitable distribution approach, rather than prioritizing creditors in South Korea. Approximately 60% of Haru Invest’s user base is located overseas, with the remaining 40% based in Korea.
Before the collapse, Haru Invest endorsed more than 80,000 members, released nearly 10 million crypto-earn payouts and recorded $2.27 billion in total transactions. Haru Invest notably targeted a 12% annual yield on most of its earn products. They reported a substantial fundraise of $4 million on a $284 million valuation in the previous September. As for the current situation of the company, Haru Invest reported in their latest update that it continues to function minimally, with its website login unavailable.
Meanwhile, a prominent shift was seen in financial market trends where stablecoin holdings have been on a decline for about 17 months. This shift garnered the US Federal Reserve’s attention, labeling stablecoins as a potential “source of financial instability”. The reason for this concern is due to the vulnerability of stablecoins to runs during periods of broad crypto market dislocation or idiosyncratic stress events.
Regardless of these conflicting reports and financial disarray, Tether managed a rise in USDT-based stablecoin loans in 2023. Whether this is merely a symptom of a chaotic market or a sign of substantial adjustments, only time will tell, but these events certainly highlight the tumultuous nature of the cryptocurrency world. This further emphasizes why due diligence and a carefully crafted investment strategy are essential for anyone considering participating in digital asset markets.
Source: Cointelegraph
