How Investors Should Respond to the Haru Invest and Delio Incidents
In June 2023, Haru Invest and Delio, two prominent virtual asset management service providers, suspended deposit and withdrawal operations following alleged financial mishandlings. These events raise significant concerns for investors, and proactive measures are necessary to safeguard their interests.
Background of the Incidents
- Haru Invest: Operated by pooling customer assets into funds managed externally. It attributed its collapse to fraudulent reporting by B&S Holdings, one of its external fund managers.
- Delio: Similar operational model, potentially linked to Haru Invest through shared fund management practices. This connection suggests possible interrelated failures between the two companies.
These issues have placed both companies in legal jeopardy, with the potential for criminal and civil lawsuits, including allegations of fraud, embezzlement, and breaches of contract.
Key Investor Actions
1. Document and Preserve Transaction Records
- Why: In the event of legal proceedings, proof of claims is crucial.
- How: Capture screenshots of all transaction history, account details, and balances from Haru Invest and associated platforms. Secure this data against potential hacking or account deletion.
2. Consider Civil and Criminal Actions
- Criminal Complaints: Investors can collectively file complaints for fraud or mismanagement.
- Civil Lawsuits: Pursue claims for damages or asset recovery. Be aware that, as non-financial institutions, Haru Invest and Delio are unlikely to benefit from state interventions.
3. Seek Preservation Orders
- Rationale: Virtual assets can be easily hidden or transferred, necessitating swift action to secure remaining funds.
- Steps: Petition the court for seizure or freezing orders against virtual assets held at domestic or international exchanges linked to the companies.
4. Monitor Developments and Collaborate
- Stay Informed: Track updates in both criminal and insolvency proceedings.
- Collaborate: Work with experts or align with other affected investors to share resources and enhance leverage.
5. Consider Liquidating Other Assets
- Why: The interconnected nature of financial mishandlings could cause broader ripple effects in the virtual asset market.
- Action: Minimize exposure by converting holdings into fiat currency, especially in centralized exchanges, until regulatory and market stability improves.
Broader Implications and Legal Recourse
Both Haru Invest and Delio are likely to face bankruptcy or restructuring procedures. Investors should:
- Engage in Bankruptcy Proceedings: File claims to participate in the asset distribution process.
- Monitor Prosecutorial Actions: Collaboration between bankruptcy trustees and criminal investigators is crucial for asset recovery.
