August | Revix’s Progress with Haru Invest

Hi Revix investor,

We’re writing to keep you informed regarding recent material developments in the Haru Invest (“Haru”) matter.

Our aim is to continuously ensure open, objective, and clear communication as developments unfold.

Haru Developments

Here are the latest notable updates:

• In June 2023, Haru, one of Revix’s primary service providers, halted all operations including withdrawals due to alleged irregularities involving its service partner called B&S Holdings. After Haru’s suspension of withdrawals, it became known that the company had entrusted customer virtual assets to B&S Holdings.
• There are currently three related fraud trials underway: one involves B&S Holdings, another concerns its CEO, Bang Jun-ho, and a third related to Haru.

Haru Trial

• On 25 June 2024, the value of Haru’s assets that the prosecution had seized was revealed. There is currently approximately 50 billion won (~US$36.1 million) in virtual assets in the prosecution’s possession.
• On 10 July 2024, the court discussed the remaining virtual assets that can be returned to victims. Haru estimated that several hundred billion won may be recovered, which includes recoveries from B&S, FTX claims, as well as sales of Haru assets. However, this estimated amount is based on the assumption that all virtual assets expected to be recovered are secured, and it does not reflect the current assets held.
• The South Korean court has ordered the prosecution to revise the amount of damage suffered by victims to reflect a realistic assessment of damages, ensuring that the reported figures accurately represent the true extent of the losses. The prosecution has until 16 August to complete this revision and submit this information to court. The next court date is expected in August, following the submission of this revised information.

B&S Holdings and Bang Jun-ho Trials

• As mentioned in prior updates, Bang Jun-ho applied for bail in June. The court reviewed his bail application and subsequently dismissed it in July.
• The final hearing of the B&S fraud trial was held on 12 July 2024. At this hearing, the prosecution sought a 15-year prison sentence for Bang, highlighting the significant damage caused and his lack of remorse. The sentencing will be handed down on 13 August 2024.

Next Steps

• These fraud trials are gradually concluding, revealing valuable details in each session. As the proceedings continue, we are learning more about the actions undertaken and the potential value of assets held by each party involved.
• Throughout the trials, it has been raised that Bang allegedly transferred Haru’s assets to FTX, where they were frozen in November 2022 when FTX collapsed. The size of B&S’ FTX claim is said to be around 230 billion won (~US$166 million). The bankruptcy lawyers for FTX have indicated that creditors of FTX are set to receive approximately 118% of the asset value that they held on the FTX platform at the time of bankruptcy. This suggests that FTX can recover a substantial amount of assets to return to B&S Holdings, which will then transfer these assets to Haru, and ultimately, back to Revix’s customers.
• Haru’s distributable assets to creditors should increase significantly as a result of recoveries from B&S and the FTX claims, as well as sales of any Haru assets. However, the exact amounts are still unknown, and there may be other Haru assets that were not seized by prosecutors.
• It still needs to be established what type of creditor Haru is in relation to B&S and the priority of their claim in relation to other creditors.
• Additionally, the likely initiation of bankruptcy proceedings could lead to the declaration of bankruptcy for the entities, with authorised bankruptcy professionals appointed to manage B&S Holdings and Haru. Should this occur, the respective bankruptcy and liquidation partners would be responsible for managing the entities, focusing on adjudicating creditor claims and facilitating the disbursement of payments to debtors according to the relevant legal frameworks, as similarly seen with FTX and Celsius.