Coin Deposit Services at Risk… A Recap of the ‘Haruinvest’ Debacle

On June 13, Haruinvest, a cryptocurrency deposit service with over 80,000 users, abruptly ceased accepting deposits and withdrawals, causing widespread concern among its customers. Delio, which initially claimed to be unaffected by the suspension of Haruinvest’s services, reversed its stance within a day and also suspended its own withdrawals. Delio stated that it had invested its own funds in Haruinvest. Earlier, Delio had registered as a Virtual Asset Service Provider(VASP) with the financial authorities and had gained the trust of its consumers.

Haruinvest stated that the suspension of withdrawals was due to encountering issues after entrusting the management of funds to a very small trading company called B&S Holdings, which has fewer than five employees. Haruinvest had promoted the ability to generate returns of 12% to 25% per year on deposits of virtual assets, depending on the chosen investment strategy. In Delio’s case, its investments with Haruinvest led to a series of problems.

Consumers were unaware that Haruinvest, with its extensive customer base, had entrusted their funds to a small trading company, or that Delio had deposited their funds with its competitor, Haruinvest. Essentially, they were unaware that their deposits were being used in such a risky manner. It is crucial to promptly establish relevant regulations, such as requiring high-risk services like cryptocurrency deposit and management services, as well as lending services, to disclose their operational methods.

The public may also need to be cautious with other virtual asset deposit services.

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