June | 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

The following are noteworthy points:

• As previously communicated, 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.
• On the 17th of May 2024, the third hearing of B&S Holding’s fraud case was conducted. During this hearing, it was alleged that B&S Holdings had placed a substantial amount of assets on FTX, which was then impacted in November 2022 when the high profile exchange collapsed. This claim still needs to be verified in the ongoing investigation. However, this is a noteworthy development as the bankruptcy lawyers for FTX have indicated that creditors of FTX are set to receive approximately 118% of the asset value they held on the platform at the time of bankruptcy. This implies that there are retrievable assets at FTX that will be returned to B&S Holdings, which could benefit Haru, and ultimately extend to Revix’s customers.
• The third hearing of Haru’s fraud trial took place on the 21st of May 2024, during which the prosecution requested that the virtual assets held in Haru’s cold wallet be transferred to one managed by the prosecution. The South Korean court denied this request for the time being and advised the prosecution to first establish a legal basis for the proposed transfer. The court proceedings did not reveal the total value of virtual assets within the Haru cold wallet. However this suggests that Haru has accessible assets that can be distributed to creditors in due course.
• Apetition for the bankruptcy of various Haru entities as well as Bang Jun-ho has been filed. These proceedings have not yet formally commenced.
• On the 27th of May 2024, the South Korean Ministry of Justice declared that the Virtual Asset Crime Joint Investigation Team of the Seoul Southern District Prosecutor’s Office is actively enforcing measures to combat virtual asset crimes that harm the public’s livelihood. The Ministry of Justice specifically mentioned Haru as a case under their scrutiny, highlighting the company’s investigation as a focal point for the authorities.

Next Steps

• The next fraud hearing for B&S Holdings’ CEO, Bang Jun-ho, is scheduled for the 31st of May 2024, while Haru’s subsequent hearing will take place on the 4th of June 2024.
• A key question that remains unanswered is the total value of B&S Holdings’ assets and liabilities.
• Asset Considerations: It is anticipated that B&S Holdings will receive a considerable amount from FTX. This transfer should occur over the coming months. Additionally, the company may possess other assets, including virtual assets and cash, which could be seized and allocated towards creditor repayments, though the existence and exact value of these assets is yet to be determined. Moreover, if the courts determine that Bang is guilty of fraud or breaching fiduciary duties, he may be personally liable to contribute to the repayment to creditors, provided that director liability laws in South Korea are enforced.
• Liability Considerations: The extent of B&S Holdings’ liabilities remains unclear, including whether Haru is the sole creditor or if other creditors exist. Details regarding the precedence of Haru’s creditor rights over B&S Holdings’ assets, relative to other claimants, are yet to be disclosed. These factors are crucial as they will influence the eventual financial restitution to Haru and its creditors.
• The commencement 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 experts 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.