Haru Invest, false and exaggerated stock advertising tactics.
Haru Invest and Delio, virtual asset deposit services that suddenly suspended withdrawals, were effectively in a ‘regulatory blind spot’. The process of attracting investors mirrored the false or exaggerated advertising seen in capital markets, yet there were no regulations addressing this. Particularly, Haru Invest, an unlicensed business operating without proper registration in Korea, was left in a complete regulatory void.
(omitted)
The 'referral' system, a typical method used by unlicensed virtual asset exchanges in Korea to attract investors, was also employed. Referral marketing involves offering various benefits, such as fee discounts, when entering a referral code provided by cryptocurrency YouTubers and influencers. These YouTubers and influencers were reportedly paid a commission for each referral. There are claims within the industry that some YouTubers earned tens to hundreds of billions of won in referral fees when the market was booming.
Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm stated, "Although the specifics of how referrals are conducted may vary, if they were actively promoted without disclosing the risks of the exchange, it could lead to criminal fraud charges or civil liability for damages due to illegal activities, so caution is necessary."
