The decision, issued on Tuesday by the Seoul Southern District Court, comes nearly a year after Haru abruptly froze customer withdrawals and shut down operations in mid-2023.
Lee and several executives at Haru Invest and its parent company Blockcrafters were accused of misrepresenting investment risks while offering high-yield returns—allegedly up to 25% annually, before the company suspended operations.
Prosecutors initially estimated damages at over $1 billion affecting 16,000 users but later revised the figure to roughly $650 million tied to around 6,000 investors. The prosecution had sought a 23-year prison sentence for Lee, arguing the investment model constituted deliberate fraud.
According to report, the court supported Lee’s claim that Haru’s business model involved legitimate investment strategies and generated real profits, distinguishing the case from deliberate Ponzi-style operations.
Co-CEOs of Blockcrafters, identified only by their surnames Park and Song due to South Korean privacy norms, were also acquitted of fraud charges. Kang, Blockcrafters’ chief operating officer, was cleared of fraud but found guilty of embezzlement and sentenced to two years in prison.
In a separate but related incident, Lee was physically attacked during court proceedings in August 2023 by an individual claiming to have lost 100 BTC, worth millions of dollars, in Haru’s failed investment platform.
The attacker was sentenced to five years in prison in April 2024. Lee survived the stabbing with non-fatal injuries and has continued to maintain that he is working toward compensating victims through bankruptcy recovery efforts.
The outcome of the Haru Invest case may influence future legal interpretations of crypto fraud in South Korea, especially in cases where business failure is driven by external market shocks rather than intentional deception.
Featured image created with DALL-E, Chart from TradingView
