South Korean prosecutors have taken a decisive step in the investigation into the withdrawal suspension case involving local cryptocurrency lender Delio and investment firm Haru Invest. An arrest warrant has been issued for a key figure known as Bang, who holds a majority of shares in B&S Holdings, the firm at the center of the controversy.
The case unfolded on June 14, 2023, when Delio, a prominent player in the crypto lending and borrowing services sector, abruptly halted user withdrawals. The suspension was attributed to the sudden cessation of deposits and withdrawals at Haru Invest, a crypto investment manager with whom Delio had partnered.
The police had applied for the arrest warrant, citing charges of fraud under the Aggravated Punishment for Specific Economic Crimes Act. The Seoul Southern District Prosecutors' Office, following due process, requested and obtained the warrant, marking a crucial step in the ongoing investigation. The police will detain Mr. Bang for ten days until January 28, after which the case will be forwarded to the prosecution for further proceedings.
The arrest comes after a criminal complaint was filed against Mr. Bang immediately after the suspension of deposits and withdrawals in June 2023. B&S Holdings was identified as the cause of the sudden disruption, and further revelations linked the company to Traum Infotech, a virtual asset trading platform developer that suffered significant losses.
Haru Invest took a serious stance by filing a criminal complaint against B&S Holdings, alleging deception through the provision of false management reports. According to Haru, B&S Holdings incurred a staggering loss of 350 billion Korean won (approximately $262 million) in the collapse of the FTX exchange.
The investigation uncovered financial instability within B&S Holdings, reporting zero sales and complete capital erosion. Another major shareholder, Mr. Song, reportedly left for Japan after the Haru and Delio incident, where he has remained since.
As the case unfolds, the cryptocurrency community and investors affected by the suspension will closely monitor legal proceedings, seeking accountability and transparency in addressing financial irregularities within the digital asset ecosystem. The arrest of Mr. Bang signifies a step toward unraveling the complexities surrounding the Haru and Delio investigation and may lead to further revelations in the cryptocurrency sector.