Crypto yield platforms Haru Invest, Delio face class-action lawsuits

A promotional image of Delio / Screenshot from Delio's Facebook

By Lee Yeon-woo

Two crypto platforms in Korea, Haru Invest and Delio, are expecting class-action lawsuits from investors, a few days after they abruptly suspended customer deposits and withdrawals.

According to legal circles and media reports, Friday, 410 investors from Haru Invest and 120 investors from Delio have launched a Kakao group chat to prepare for a lawsuit.

Chances are high that they will sue the platforms for alleged “fraud.”

Both platforms have offered the so-called “deposit” services, through which customers can receive interest from their virtual assets if they deposit a certain amount for a specified period. Haru Invest and Delio have offered maximum annual interest rates of 12 percent and 10 percent, respectively.

On Tuesday, Haru Invest halted its deposit and withdrawal services, stating that its consignment operator, B&S Holdings, is suffering from problems. Haru Invest claims that B&S Holdings had provided false information and announced its plans to file a lawsuit against the firm.

Amid market speculation that Haru's losses could reach hundreds of billions of won, concerns are being raised that this situation could drag on.

The effect has even spread to local platform Delio. On Wednesday, Delio also announced a halt to its withdrawal services, citing Haru Invest's abrupt decision as the reason. Delio has reportedly deposited a certain amount of virtual assets in Haru Invest, despite claiming that it operates assets independently. The platform also offers instant loans against crypto collateral.

As the situation is turning serious, Delio plans to hold an investors' meeting on Saturday morning at its headquarters in Gangnam District, Seoul.

“I sincerely apologize to the investors who believed in us and used our service,” said Delio CEO Jung Sang-ho. “We will report our current situation to investors and discuss feasible ways to recoup investments.”