DELIO PLATFORM GOES BANKRUPT WITH $1.75B in ASSETS LOST
On November 22, a court in Seoul declared Delio platform, a South Korean virtual asset deposit platform, insolvent, according to numerous local press reports.
Last year, Delio suspended withdrawals due to its outstanding debt of 245 billion won ($1.75 billion) to its customers.Delio says there is possibility of resolving customer issues, the platform will initiate liquidation proceedings. The initial creditors’ meeting will be conducted on March 19, 2025, and customers can submit claims until February 21, 2025. Subsequently, Delio platform needed to recover its assets following the bankruptcy of FTX in November 2022 and return consumer assets after June 13, 2023. The bankruptcy has impacted approximately 2,800 customers.
In September 2023, the platform filed a countersuit against the South Korean government for misinterpreting the law. This action was taken in response to the Financial Intelligence Unit’s recommendation to terminate the CEO Jeong Sang-ho on September 1, 2023. The platform’s business license was provisionally suspended and fined 1.83 billion Korean won ($1.34 million).
Delio, established in 2018, was the first Korean crypto firm to obtain virtual asset service provider (VASP) status from the FIU in 2022. In June of this year, Delio suggested establishing a new company, transferring its debt to it, and selling the company to a bidder seeking VASP status.
Jeong Sang-ho is currently facing charges of fraud, embezzlement, and breach of trust. In June, he contended in court that the platform did not provide “principal protection” for customers’ deposits.
Haru Invest, Delio’s sister corporation, ceased operations concurrently with Delio. It filed a lawsuit against B&S Holdings, a consignment operator, on June 14, 2023, for furnishing it with fraudulent management reports. On November 20, Haru Invest was declared insolvent.