April 19, 2024
Latest Cryptocurrency News

South Korean Crypto Lending Firm Delio Under Investigation for Alleged Fraud and Embezzlement

South Korean crypto lending firm Delio is currently being investigated by the country’s Financial Services Commission (FSC) as of June 30, as per local reports. The commission has accused Delio of fraud, embezzlement, and breach of trust about its unilateral suspension of users’ deposits and withdrawals on June 14.

At an extraordinary investors’ meeting on June 17, Jung Sang-ho stated that the company would resume withdrawals but without a fixed schedule at that time. On June 27, Delio started allowing withdrawals for a portion of its staking services.

Sang-ho assured Delio would secure as much capital as possible to provide compensation. With an estimated $1 billion in Bitcoin (BTC), $200 million in Ether (ETH), and $8.1 billion in various altcoins, Delio currently stands as one of South Korea’s largest crypto lenders. Meanwhile, the CEO and management staff of the company have reportedly been prohibited from leaving the country while an investigation by prosecutors is underway.

On June 13, Delio’s sister company, Haru Invest, suspended withdrawals and deposits due to an issue with a “consignment operator.” Delio followed suit the next day, likely due to counterparty exposure. Following the announcement, Haru Invest has reportedly laid off a significant number of its employees. The company has stated that it is taking legal action against its service partner.

Delio is a registered virtual asset provider (VASP) subject to regulation by the country’s Financial Intelligence Unit. However, Haru Invest is reportedly not a VASP and therefore falls outside the jurisdiction of regulators. It has been alleged that Delio management denied any exposure to Haru Invest shortly before deciding to suspend withdrawals.

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