BitYields exclusive: Delio has 6M+ exposure to Haru Invest on ETH blockchain alone

Research by BitYields has identified the ERC-20 wallets used by Delio to delegate funds to Haru Invest. Almost 4200 ETH ($7M) have been transferred with less than 620 ETH ($1M) being returning back*. Data for USDT, BTC and XRP is not included.

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TL;DR:

  • Haru Invest has paused unilaterally processing of withdrawals on 13.06.2023[1], citing disruption of service caused by B&S Holdings.
  • Delio announced on 14.06.2023[2] pausing of withdrawals too, initially denying[3][4], later confirming exposure to Haru Invest.
  • Blockchain investigation by BitYields has identified at least two wallets (Wallet #1, Wallet #2) used to delegate user Delio user assets to Haru Invest
  • At least 4192 ETH (~6.60M USD) have been transferred to Haru Invest, with only 629 ETH (~1M) being returned directly on the Ethereum blockchain from May 2022 to June 2023
  • Total ETH volume of Delio is ~43000 ETH (~68M USD), indicating an estimate of asset hole between 7-12%

NOTE: Depending on tracking method used the returned values can be calculated differently. If we consider direct wallet-to-wallet returns, only ~620 ETH have been returned back to Delio. If we consider however a theoretical "circular path", involving centralized exchange common wallets, the asset hole might be as little as $1.5M, however we doubt this indirect optimistic calculation method.


Introduction

Blockchain intelligence is the art of tracing funds across known and unknown wallets, which requires special knowledge and some automatization tools. It is one of the surest ways to reveal what exactly has happened when a cryptocurrency project fails.

In terms of the collapse of the South Korean cryptocurrency investment platform Delio, there are half-mouthed admissions that the platform has practically outsourced its customer funds to Haru Invest (without explicitly informing them).

Our research shockingly suggests that in the case of Delio, the cluster of wallets associated with Haru Invest ranks second in terms of the overall outgoing transaction volume of Delio, with a total size of 4192 ETH (6.6M USD), or about 10% of the entire outgoing transaction volume of Delio (~67-70M)[3].

The first place is occupied by the personal deposit address of ByBit in Delio, where most of the customer assets seem to have been moved (which theoretically should be unaffected by the incident of Haru Invest). This wallet has received 25% of the total outgoing volume of Delio[3]. ย Please see the last section "Bonus content" for more information on this.

Wallets used by Delio to transfer funds to Haru Invest

Image 1: Haru Invest cluster wallets have received ~10%(4192 ETH) of the total outgoing transaction volume (43 147 ETH) of Delio on the Ethereum blockchain[3].

1. Wallet: "Delio ETH Common pool" (Address: 0xff5e343aa7a5a65265d9f608ebd6ac92a685bb14)[5]

This is the wallet where all ETH and USDT deposits of customers of Delio are being stored. In essence, all customers have the so-called "personal deposit addresses", where they can transfer their funds. Then, at regular intervals, an automated script moves these funds to the "common treasury" of the platform, where all customer assets are pooled together and transferred towards further locations

This wallet has transferred a total volume of 4192.71 ETH (Editor's note: 6 694 122 USD as of 23.09.2023[3]) to Haru Invest deposit pools via the intermediary wallet "SAVIOR".

Image 2: Suspected operator wallet "SAVIOR" has received ~40% of its funds from Delio ETH Common pool, but has withdrawn directly only 16% from Haru Invest asset pools[3].

2. Wallet: "SAVIOR" ย (Address: 0xba5514ac708605ae57ce38ad6efd3ea172bc5ae9)[6]

The "SAVIOR" has received a about 10% of the entire outgoing ERC-20 transaction volume of Delio and ultimately it leads towards one of the 6 operator wallets of Haru Invest[3]. We consider that this wallet is either under the operation of Haru Invest or was at least controlled mutually[3].

First transaction is seen on 6 May, 2022, with size of 500 ETH (Editor's note: Worth 1 346 040 USD during the time[3]) being moved from "Delio ETH Common pool" to "SAVIOR". In total 1100 ETH is transferred during May-June 2022, with 1587 ETH being returned back to Delio in July 2022 (Editor's note: A 44.27% increase on the initial amount[3]). Following that, in August 2022, "Delio ETH Common pool" transfers new 500 ETH to "SAVIOR", which are immediately moved to Binance. In September 2022, additional 200 ETH are committed.

However, interestingly, the big hit comes on 4 November 2022 when Delio transfers a whooping 2092.71 ETH (Editor's note: 3 442 641 USD at the time[3]) to "SAVIOR", just 2 days after the crisis with FTX has been started after the revelation that a significant chunk of the assets of FTX are held in its native FTT token (Editor's note: On the 2nd of November, 2022, CoinDesk disclosed that a considerable part of Alameda Research's holdings were in FTT, which is the proprietary token of the FTX exchange. The report indicated that the total FTT tokens in circulation were valued at $5.1 billion. Additionally, Alameda Research had $3.66 billion in "unlocked FTT," $2.16 billion as "FTT collateral," and another $292 million in "locked FTT"[3][7]). It is unclear why any company would decide to transfer funds out amidst such a situation, while blockchain data hardly suggests any kind of "debt" being present from Haru Invest towards Delio (therefore, excluding a scenario where Haru Invest might have requested its funds during a time of crisis). Additionally, we do not detect any other flow of resources from Haru Invest towards Delio whatsoever.

Yet, on 18.11.2022, just 11 days after the international public meltdown of FTX, "Delio ETH Common pool" transfers additional 100 ETH (Editor's note: 121 098 USD at the time[3]) to "SAVIOR" , however, those are returned back after just 4 days. On 12.12.2022 Delio receives back 200 ETH (Editor's note: 255 074 USD at the time[3]) from "SAVIOR", and on 23.12.2022 it withdraws back additional 100 ETH (Editor's note: 121 997 USD at the time[3]). In January 2023, Delio reclaims just 50 ETH and 78.44 ETH from "SAVIOR", or 128.44 ETH in total.

Finally on 16.05.2023, Delio commits again 200 ETH (Editor's note: 364 904 USD at the time[3]) to "SAVIOR" and withdraws back 100 ETH (Editor's note: 186 213 USD at the time[3]) on 01.06.2023, and ultimately this is the last known ERC-20 transaction between the wallet clusters associated with Delio and Haru Invest[3].

We know two additional wallets that have been used for alternative exchange between Delio and Haru Invest (although with a lesser volume), which are not included in this article.

NOTE: Please note that we add nicknames/labels to wallets for our own readability purposes. In reality ERC-20 wallets have no names or labels.

Commentary

In terms of blockchain transactions, it appears the partnership between the clusters of Delio and Haru Invest have have been established around May 2022[3] and continued actively until June 2023, with no significant disruptions in frequency or volume. It is clearly noticeable that Delio has always deposited more than it has withdrawn back. This pattern illustrates a tight and intimate relationship between the two companies, which is in stark contrast with the claims of the CEO of Delio on 16.06.2023 (Editor's note: Only 15 days after their last confirmed withdrawal from Haru Invest[3]) that ย "communication is not working" their partners[8].

๐Ÿ” BONUS: Full archive of transactions and wallets of Delio

Image 3: Transaction direction network of Delio[3].

BitYields releases this preliminary information in sense of serving the public good and bringing transparency to the involved parties. However, there is much more technical and sensitive information which our team has gathered in the complete data archive and we believe might be useful to creditors, lawyers, investigators and government officials.

Image 4: Preview of Blockchain intelligence chart of the largest asset outflows from Delio[3].

The full data archive contains:

  • All relevant major wallets with labels and addresses, including notes
  • Volume statistics (in and out) for major relevant major wallets, including pie chart visualization
  • Spreadsheet with the entire database of Delio transactions, starting from largest whales and including full transaction details and recipient addresses. This is manually compiled built using our private software solution. Incoming transactions: 3986, Outgoing transactions: 6014.
  • Blockchain intelligence chart, together with custom charts, labels, arrows, traffic volumes and logical relationships.
  • Account deposit address of Delio in ByBit, which might still hold user assets which can be recovered by creditors. Using this address, officials can directly access the location with the largest outgoing user funds of Delio (after Haru Invest)
  • Account deposit addresses of Binance where additional funds of "SAVIOR" are stored (might lead to KYC identification for law enforcement and prosecutors, thus increased of identifying and returning assets for Delio customers)
  • Operating wallets of Delio (including details about their altcoin transactions):

โ€ƒ- Delio: RETURNER1

โ€ƒ- Delio: RETURNER2

  • Additional information about 3 high-value wallets related to the situation:

โ€ƒ-โ€ƒHaru: TITAN

โ€ƒ-โ€ƒHaru: KINGWHALE

โ€ƒ-โ€ƒHaru: BUNKER

  • 3 months of free chat support and clarifications on the provided information
Image 5: Delio complete transaction database. All transactions are ordered by size and date, in order to identify largest flows. (NOTE: Example shows the middle of the database)[3]

Decryption of the archive:

All the the above information is included in fully uncensored format in the encrypted archive stored on the following address:

https://bityields.s3.eu-central-2.amazonaws.com/delio/delio.txt

Cost of the decryption: 1.00 BTC

Wallet address: bc1qqd9sz0cw862cv5f0x7h3fllgd43w24348l57gx

The content will be decrypted within 24 hours when the wallet balance reaches 1.00 BTC (either by single or multiple transactions).

If you would like (for whatever reason) to contact us privately and have this information not shared with others, feel free to reach us at:

The information will be provided on "first-come, first served" basis.


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DISCLAIMER: All information in this article is released in bona-fide spirit of investigative journalism and in order to serve public good, bring transparency and assist creditors or officials involved in the case. The team of BitYields reserves its right to modify, remove or expand the published content. Any mistakes or inaccuracies are involuntary and shall be corrected or removed upon notice. The team of BitYields might release some part of the information in exchange for compensation, in order to be able to sustain our research and server hosting costs. No part of the content of this article or website should be considered as a legal, financial or investment advice in any form. Cryptocurrencies and financial products are very volatile and subject to high risk. Always do your own research and proper due diligence.


Reference:

  1. Haru Invest Blog, Important Update โ€“ June 13, 2023, 13.06.2023: https://haruinvest.com/blog/important-update-june-13-2023
  2. CoinTelegraph, South Korean Bitcoin lending platform Delio pauses withdrawals, 14.06.2023: https://cointelegraph.com/news/south-korean-bitcoin-lending-platform-delio-pauses-withdrawals
  3. Personal research conducted by BitYields
  4. CoinTelegraph, South Korean crypto lending firm Delio under investigation by regulators, 30.06.2023: https://cointelegraph.com/news/south-korean-crypto-lending-firm-delio-under-investigation-by-regulators
  5. Ethereum blockchain, Address: 0xff5e343aa7a5a65265d9f608ebd6ac92a685bb14 (BitYields label: "Delio ETH Common pool"), 23.09.2023: https://etherscan.io/address/0xff5e343aa7a5a65265d9f608ebd6ac92a685bb14
  6. Ethereum blockchain, Address: 0xba5514ac708605Ae57cE38aD6Efd3EA172bc5aE9 (BitYields label: "SAVIOR"), 23.09.2023: https://etherscan.io/address/0xba5514ac708605ae57ce38ad6efd3ea172bc5ae9
  7. Wikipedia, FTX, 23.09.2023: https://en.wikipedia.org/wiki/FTX
  8. Reddit, Delio held a meeting today with their investors."June 16, 2023", 17.06.2023: https://www.reddit.com/r/HaruInvest/comments/14bl750/delio_held_a_meeting_today_with_their