July 2023 | Latest Developments & Crypto Asset Security
Dear Revix Investor,
We would like to thank you for your patience, trust, and understanding over the past weeks.
Consistent with our dedication to maintaining open and transparent discussions about the evolving situation with Haru Invest (“Haru”), we have prepared a detailed update on the measures we’ve taken and expect to take in the future. Our ongoing efforts prioritise recovering assets held with Haru while ensuring the utmost safety of your crypto assets entrusted to us at Revix. Rest assured, we continue to offer the same seamless and reliable investment services as always.
We’ve chosen to balance frequent communication with our investors about the ongoing Haru developments against the importance of conveying new and useful information. We plan to share further updates as and when important information becomes available. Should you have any queries, you are welcome to engage with our customer support team. You can reach out to us via email at support@revix.com.
Haru Invest Developments
Haru has made several announcements in recent weeks. In brief, Haru is participating in an active criminal investigation to determine the extent to which it has been defrauded by a partner company that the firm engaged with called B&S Holdings. As a result of this investigation, the directors of both organisations remain grounded in South Korea, where the authorities are conducting their investigations. Haru has publicly committed to redistributing the crypto assets it currently holds. How ever, the timeline for these distributions remains unclear due to several factors, including the aforementioned criminal investigation.
The Actions Revix is Taking Against Haru
Haru is an international business with a presence in several jurisdictions. Haru accordingly finds itself potentially subject to a variety of investigations and claims, including those initiated by Revix. The complex nature of these legal and regulatory processes, each demanding adherence to due process, will impact the speed at which this matter will progress. In response to this situation, Revix has promptly implemented strategic interim measures. We are confident that these actions bolster the prospects of swiftly recovering the assets retained by Haru. These actions, which are outlined in detail below, encompass direct engagement with Haru, engagement with Haru’s regulatory bodies, as well as potential assistance from the South African financial regulator.
First, Revix delivered a formal written letter of demand to Haru, which included a strategically formulated request for information. This is a necessary step in the dispute resolution process and sets the foundation for securing our customers’ claims in future arbitration proceedings or High Court litigation. Should there be a viable litigation path, then Revix will institute legal proceedings at the appropriate time. We will keep our investors updated on our progress in this regard.
Second, in addition to these legal steps, Revix has approached several international regulators with jurisdiction over Haru, including in the United States, the European Union and the British Virgin Islands. In doing so, Revix has delivered key information to these regulators and requested urgent enforcement action against Haru.
At present, Revix has received formal responses from the United States Financial Crimes Enforcement Network (FinCEN), the Financial Crime Investigation Investigation Service (FCIS) of Lithuania, and the Financial Services Commission of the British Virgin Islands (FSC). In respect of FinCEN, our hope is that the matter is ultimately referred to the U.S. Securities and Exchange Commission (SEC) for further investigation. Further, the Lithuanian FCIS has registered a formal case number, and the matter has been assigned for further investigation. Finally, we’re also engaging with the FSC, and we’re making every effort to expedite its formal complaints and enforcement process.
In South Africa, Revix has engaged with the Financial Sector Conduct Authority (FSCA), who may likewise take steps to contact the applicable international regulators of Haru. In all these instances, Revix will make every effort to ensure that the regulators are positioned to pursue the appropriate enforcement actions and remedies.
Please be assured we’re making every effort to expedite the recovery proceedings. Our team is constantly reassessing our regulatory and legal strategies to optimise the outcome for our investors.
Crypto Asset Security at Revix
As noted in our last communication on this matter, Revix adheres to a diversified strategy for crypto asset storage, commonly referred to in the industry as crypto asset custody. Our approach is aimed at minimising the inherent risks associated with the custody of crypto assets. In essence, we disperse crypto assets across a multitude of mechanisms and platforms, ensuring each operates independently of the others. A substantial segment of these assets is maintained under our direct control, such as in secure cold storage. A smaller fraction is safeguarded in partnership with credible, thoroughly scrutinised third-party platforms, which include established crypto exchanges.
Subsequent to the suspension of the Haru platform, we have materially reduced our reliance on third-party platforms, including crypto exchanges and wallet providers. We’ve taken these actions to recalibrate the balance between crypto asset security and liquidity and accessibility for our customers.
It’s important to note that Revix is different from traditional crypto asset exchanges as we execute our investors’ crypto asset buy and sell transactions across multiple crypto exchanges. We designed Revix this way to benefit our users by providing superior trade execution pricing, reducing the reliance on any single crypto asset exchange, providing deeper liquidity and offering a greater number of trading pairs for our users. As a result, we only deploy a small portion of crypto assets on crypto asset exchanges which are all used for liquidity purposes.
A large portion of the crypto assets controlled by Revix is safeguarded within our internally managed custody system. This robust security infrastructure employs both Multi-Party Computation (MPC) and Multi-Signature (Multi-Sig) methodologies, primarily utilised in cold storage, ensuring maximum protection for your assets.
We’re further leveraging Fireblocks’ industry-leading custody infrastructure that utilises advanced MPC technology and Ledger’s globally recognised hardware and software solution as part of our internally managed custody. The remainder of the internally managed crypto assets are distributed across multiple crypto storage solutions.
Fireblocks is a custody choice for financial institutions such as BNY Mellon, BNP Paribas and ANZ Bank, amongst many other banks and financial institutions. Ledger, meanwhile, is utilised by crypto exchanges, including Bitstamp and Huobi, as well as crypto prime brokerage Wintermute and institutional custody specialist Komainu.
Additionally, we’re actively engaging with a prominent, regulated financial institution for crypto asset custody to complement our existing custody framework.
This diversified approach is consistent with our risk management framework that ultimately establishes the protocols and limits we consistently adhere to, enabling us to effectively mitigate risk, ensure maximal security, and maintain the accessibility of your assets.
Our commitment at Revix is to ensure the utmost safety of your assets and maintain complete transparency on our custodial and trade practices. We plan to release more public, verifiable information shortly.
Please reach out to our customer support team at support@revix.com if you have any questions.
Sincerely,
The Revix Team
