🚫 South Korean crypto platform Delio declared bankruptcy due to the inability to withdraw huge customer assets!
Cryptocurrency platform Delio announced that it would cease operations due to the inability of customers to withdraw virtual funds worth $1.75 billion, and was declared bankrupt by the local court on Friday.
It is reported that Delio was established in 2018 and obtained the qualification of virtual asset service provider issued by the Financial Intelligence Agency in 2022. It is the first Korean company to be recognized in this way.
Relevant people in the local court pointed out that the main reason for Delio's bankruptcy was that it stopped withdrawals and operations, and the losses were extremely serious, so it was deemed unable to repay its debts.
Since the middle of last year, the platform has not allowed the withdrawal of virtual asset funds, resulting in about 2,800 cryptocurrency investors being affected, and the value of cryptocurrencies that cannot be retrieved is $1.75 billion. As a deposit and management company, the platform operates virtual assets such as Bitcoin deposited by customers to make profits and pay interest.
It is worth noting that a large part of the virtual assets deposited by customers in Delio are stored in FTX's entrusted account. After FTX went bankrupt, these custodial virtual assets were obviously unrecoverable, which eventually led to Delio's suspension of withdrawal business until bankruptcy.
According to reports, the South Korean court has now clearly ordered Delio's creditors to submit their claims before February 21, 2025, and set the date of the creditors' meeting as March 19, 2025.
As early as September 2023, the Financial Intelligence Unit of South Korea, a national agency, proposed to fire Delio CEO Jeong Sang-ho for this case. The government also suspended the platform's operating license and imposed a fine of $1.34 million.
Currently, Delio's CEO faces multiple charges including "fraud, embezzlement and breach of trust." However, Delio executives claim that investors' deposits are not "principal protected."
Delio's experience has sounded a heavy alarm for us: although digital assets may bring huge growth opportunities under certain circumstances, the risks associated with them should not be underestimated. Learning to hold your own coins can improve the security of your assets to a certain extent.
