South Korean crypto lending firm Delio is facing challenges in providing normal services to its clients after its assets were seized by a local financial regulator. In a blog post translated from Korean, Delio revealed that an ongoing legal battle with depositors, as well as a search and seizure of the company’s assets on July 18 by the Financial Services Commission (FSC), resulted in the seizure of all assets owned by customers and the company, including cold wallets and ledgers. These recent actions have made it difficult for Delio to continue its normal operations and there is a need to prevent the scattering of Delio’s property in the interest of depositors.
As a result, Delio has suspended interest payments for its deposit and vault users starting from July 24. The firm has also suspended services that require additional expenses, such as interest payments and operational expenses. This is not the first time Delio has faced disruptions. On June 14, the company halted withdrawals and deposits on its platform in order to protect the assets of its customers from market volatility caused by the halting of deposits and withdrawals at its sister lending company, Haru Invest.
Haru Invest itself had suspended withdrawals on June 13 after an investigation revealed false information provided by its consignment operator, B&S Holdings. In response, Delio’s CEO Jung Sang-ho announced that the firm would resume withdrawals, but did not specify a timeline for the full functionality to return. On June 27, Delio reopened withdrawals for some of its staking services. However, despite these efforts, the FSC launched an investigation into Delio and later sued the company for fraud, embezzlement, and breach of trust related to the unilateral decision to suspend user deposits and withdrawals on June 14. The FSC also banned CEO Jeong Sang-ho and others from leaving the country.
Delio is a prominent crypto lending platform in South Korea, offering various custody, lending, and staking services. It was founded in 2018 and currently holds approximately $1 billion in Bitcoin (BTC), $200 million in Ether (ETH), and around $8.1 billion in altcoins, according to its website. Cointelegraph reached out to Delio for comment but did not receive an immediate response.
This case highlights the challenges faced by crypto lending firms when dealing with regulatory issues and legal battles. The actions taken by the FSC have not only disrupted Delio’s operations but also affected its customers who rely on the platform for their crypto-related activities. It remains to be seen how Delio will navigate through these challenges and resume its services while addressing the concerns raised by the financial regulator.
In conclusion, Delio, a South Korean crypto lending firm, is facing difficulties providing normal services to its clients after having its assets seized by the local financial regulator, the FSC. The ongoing legal battle with depositors and the search and seizure of the company’s assets have made it challenging for Delio to continue its operations. As a result, the firm has suspended interest payments for its users and services that require additional expenses. This is not the first disruption for Delio, as it previously halted withdrawals and deposits to protect its customers’ assets from market volatility caused by issues at its sister lending company, Haru Invest. However, the FSC’s investigation and lawsuit against Delio have further complicated the situation for the firm and its CEO. This case highlights the challenges faced by crypto lending firms in the face of regulatory issues and legal battles.