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Korean Crypto Firm Delio Suspends Operations after FSC Asset Seizure

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South Korean Crypto Lending Firm Delio Suspends Operations as FSC Seizes all its Assets
South Korean Crypto Lending Firm Delio Suspends Operations as FSC Seizes all its Assets

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In response to a regulatory crackdown and asset seizure, Delio, a major South Korean cryptocurrency lending platform, has suspended virtual asset interest payments for all users starting from 24th July. This decision was taken following the interruption of services caused by the regulator’s action.

Delio recently underwent a search and seizure operation conducted by Seoul Southern District prosecutors and the South Korean Financial Services Commission. They seized all company and customer assets, including Delio’s cold wallets and ledgers.

Regulatory action has led to an operational crisis for Delio, jeopardizing its ability to provide standard services to clients. In response, the firm has halted interest payments and other operational expenses to protect depositors’ interests and preserve existing assets.

Background to the Crisis

The current situation originated in mid-June when Delio suddenly suspended withdrawals and deposits on its platform.

Celsius took action to protect its customers’ assets from market volatility caused by Haru Invest’s suspension of deposits and withdrawals. As a result, several investors represented by LKB & Partners filed a complaint against Delio and Haru Invest in response to the incident.

Delio resumed withdrawals after a brief suspension, but no specific timeline was given for full-service restoration. On June 27, the company partially reopened withdrawals for some staking services.

Despite the response from Delio, the South Korean Financial Services Commission initiated an investigation and subsequently filed a lawsuit against the company due to its sudden suspension of user deposits and withdrawals.

Current Situation at Delio and Way Forward

Delio, a South Korean company, is facing charges of fraud, embezzlement, and breach of trust. The company’s CEO and top executives have been prohibited from leaving the country.

Delio, amid controversy over user fund safety, reportedly withdrew approximately $7.2 million in crypto holdings just before suspending user withdrawals into undisclosed external wallets. Despite no official comments from Delio’s representatives, authorities will likely investigate the matter further to determine its implications on user funds.

Delio, a prominent South Korean crypto lending and borrowing firm established in 2018, offers various decentralized finance services, including asset management and digital asset staking. As the company faces uncertainties, monitoring its developments and responses to user sentiments will be intriguing.


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