Two South Korea-linked crypto platforms halted withdrawals in the space of 24 hours, a reminder of the ongoing risks in the digital-asset sector following a spate of blowups sparked by a market rout last year. One of them, Delio, said the temporary suspension took effect on Wednesday and blamed “market volatility and increased confusion” triggered by the suspension of withdrawals and deposits at the other outfit, Haru Invest.
Haru Invest had cited a problem with a service provider for its move and subsequently tweeted that it’s taking legal action against a company for allegedly providing management reports containing false information. There was a “sudden surge of withdrawals on our end in the aftermath of Haru Invest’s withdrawal suspension,” said Delio’s Chief Executive Officer James Jung. “We have thus temporarily suspended withdrawals to calm the situation.”
Both platforms touted double-digit percentage yields. Delio’s website lists services including deposits, lending and staking — the process of locking up tokens to facilitate the functioning of blockchains in return for rewards. Haru Invest says it deploys an “algorithmic trading model” to generate returns.
Crypto investors seduced by high returns endured a rude awakening in 2022 when a $1.5 trillion digital-asset rout exposed risky practices and led to the bankruptcy of exchanges like FTX and lending services such as Celsius Network. South Korea also witnessed a string of scandals linked to virtual coins, most prominently the capture of former fugitive Do Kwon after coins he created erased at least $40 billion in a crash just over a year ago.
Claimed Transactions
The woes at Delio and Haru Invest appear to be on a smaller scale. Delio’s total accumulated transactions mostly span about $1 billion of Bitcoin and $195 million of Ether, based on its webpage. Haru Invest had under $1 billion assets under management as of April 18, its website shows.
Delio is one of three dozen crypto platforms with a virtual-asset service provider license in South Korea. Haru Invest’s website says the business is headquartered in Singapore and has an office in Seoul. Both businesses said they are trying to safeguard customer funds via the recent suspensions. Haru Invest’s CEO Hyungsoo Lee didn’t respond to requests for comment.
Haru Invest’s Singapore office appeared to be empty on Thursday morning. A number of crypto firms with Singapore links hit the buffers last year, leading the island to propose curbs on retail-investor participation in the sector. Crypto markets have partially rebounded in 2023 but remain under a cloud, in part as US regulatory agencies aggressively crack down on the industry.