Read Haru Invest community’s first AMA with Hugo from Consensus 2022


Hugo Lee answered our Haru Invest community members' questions about Haru Invest's high APR, adding USDC, and more.

June is a busy month for us at Haru Invest. Our team flew to Austin, Texas for Consensus 2022 by CoinDesk, one of the biggest crypto conference. Our CEO Hugo did a workshop on best Bitcoin investment strategies and you can read more about it here.

And because we could not host everyone at our workshop, our team decided to do an Ask Me Anything about our workshop and Haru Invest services answered by Hugo.

Our Haru Invest community members asked about how Haru Invest maintains high APR, adding USDC and much more. Read the full AMA thread here or read below for highlights.

Key takeaway

  • On Friday, June 10, Hugo answered r/HaruInvest members’ questions on Haru Invest
  • This was our first AMA since launch and we plan on doing more AMAs throughout the year. Community means a lot to us. Help us help you!

Ask Hugo Anything at Consensus 2022: Highlights

Due to a large volume of questions, Hugo was not able to answer all of the questions but your voices were heard. If your question went unanswered, don’t worry. We got you.

1 – How does Haru Invest maintain high APR when competitors are decreasing theirs? And how is it possible to maintain over 15% APR by arbitrage?

Hugo: Simply put, I think the main difference is the business model – we being algorithmic trading based and competitors being borrow-lending model.

As our AUM grows, we may have to reduce APR due to increase in lead time allocating assets.

Back in 2019, we already thought that arbitrage between spot exchanges was going to less profitable (as it will become more efficient).

Having said that, arbitrage doesn’t just exist between spot exchanges – our definition of arbitrage also include arbitrage between derivative/futures exchanges. In derivative exchanges,

we focus on the gaps and differences of perpetual futures and funding fee.

2- Is Haru Invest exposed to any stETH holdings or any other staked ETH that can cause illiquidity?

Hugo: Nope. We don’t entrust any crypto asset in other DeFi or CeFi platforms, like Anchor protocol.

All your crypto assets are managed directly by our in-house trading teams and our trusted partners. All our partners have gone though thorough due diligence.

3 – Does a long term bear market/crypto winter effect Haru Invest?

Hugo: Yes, but not much. Price volatility and trading volume are couple of factors in driving high profits.

So the drop in trading volume during the bear market isn’t favorable for us. Having said that we are still generate good profits and provide the returns. Despite the bear market, many

derivative exchanges have daily trade volume of over $1 billion USD – enough for us.

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4 – What is your AUM and how much has it grown?

Hugo: Sorry but we won’t be able to disclose this number today for various reasons such as legal and regulatory. However, our total transaction volume is approx. USD 2 billion. Our

AUM grew 12x vs. 1 year ago.

5 – What are the biggest risks for Haru? What are the circumstances that would cause depositors to lose funds?

Hugo: I think the biggest risk for Haru Invest is the total collapse of Bitcoin and Ethereum. As someone said the core of Bitcoin(hash function) can be destroyed with the development of

quantum computers, collapse of Bitcoin would have the biggest impact on us.

But would this really happen? Miners community can increase the difficulties by increasing the digit of the hash function so I believe people in this field are already prepared for this.

6 – What happens with user funds in case of bankruptcy?

Hugo: First, we will do our best to not get bankrupt. Our performances tell us that.

How Haru Invest operate is that the crypto assets belong to you – we just have the rights to manage them on your behalf.

So even if something happens to Haru Invest, Haru Invest users will get their crypto assets back, with high priority than all others including equity investors.

7 – What measures do you take to prevent a rogue employee stealing funds?

Hugo: We have complex compliance process in place when it comes to our asset management. Firstly, a lot of the process is automated (especially when assets are deposited). And no

one person has full control and can make transfer. Even I don’t have full control of how assets are allocated or moved.

8 – Do you have people exclusively dedicated to keep funds secure and look for attack vectors?

Hugo: We work with BitGo, cold wallet and various modules in place to keep the assets secure. Also we have lawyers and compliance officers to constantly check on this.

9 – How many counter parties do you work with?

Hugo: If counter parties means asset management partners, we have 10+ global management partners. In terms of percentage of funds, it fluctuates but our in-house trading team

manages more than half always.

10 – Please provide detail on your risk management practices and internal and external audits.

Hugo: We do take a lot of checks to mitigate risks with our partners. First, in order to become our partner, they go through multiple tests and need to meet our extremely tough criteria –

partner org structure, trading capabilities, how they handle different market scenarios, etc.

Also, in our compliance process, we have several checking points that we monitor on a weekly and monthly basis.

11 – Do you have public audits or at least an income report?

Hugo: For our equity investors, we have done public audits but this audit is based on fiat currency. Unlike other lending platforms, Haru Invest works on the algorithmic trading model

and the crypto assets are allocated and traded in real time across multiple exchanges. Because of this, we have received comments from auditors saying that it is extremely difficult to

carry out audits using fiat standards. So now we are speaking with top tier auditing firms to carry out audits that fits our business model.

12 – When exactly did you delist Terra KRW and why exactly? Did you predict LUNA’s fall beforehand?

Hugo: We delisted Terra KRW about a year ago. In terms of LUNA’s fall, we did see serious risks when we looked into it. We felt that UST lacked reliability vs. USDT so we just focused on

USDT.

13 – Can you give any details on what coins you are going to be adding to Haru Invest and also the reason?

Hugo: What’s important for us is if we can generate absolute returns on the number of coins via algorithmic trading.

To explain in a simple way, a particular coin needs to have a certain number of trade volume across multiple exchanges. The next coin? Please wait and see!

14 – Any plans to add USDC to your assets managed?

Hugo: Yes we do have plans to USDC.

15 – Plan to add Lightning BTC payments?

Hugo: Lightning BTC payments? Yes we hope to add. It is in our roadmap.

16 – How high do you think BTC ATH can go in late 2025 according to past 4-year cycles?

Hugo: Only God knows. #fingerscrossed

17 – Will there be new frosts?

Hugo: Yes we do have plans. Expect a news about Freeze in the next few weeks.

18 – Please provide ownership and control structure chart of Block Crafters, Haru Invest(Korea), Haru Management Limited(BVI) and other related entities(eg, in Singapore).

Hugo: Over the past couple of years, we have worked with numerous legal firms and consultants to setup entities across regions to make sure we continue to provide stable services to

all our members, even if something unexpected occurs at a regional level.

As we doing this, there is no one clear license that fits our business model and that is why we setup approved fund in BVI, owned by Haru Management Limited.

19 – Do you think your customers have enough information about your company? What are you planning to address that?

Hugo: We will look to deliver more information and quality content about us going forward. Starting with this AMA, we will try to communicate more openly. Thanks for dropping by.

20 – Any video of Hugo Lee on the stage of Consensus 2022?

Hugo: Will try to get the video from CoinDesk and share.

Consensus 2022: Haru Invest Top Bitcoin Investment Strategies Workshop Ends in a Great Success

Thank you for reading the highlights for Haru Invest’s first AMA. Our community is always open to our Haru Invest members so please join the family here on Reddit, Telegram, Twitter and Instagram as well.

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