A Seoul court officially declared South Korean virtual asset deposit platform Delio bankrupt on November 22, 2024. The company, once a major player in the cryptocurrency space, owes 245 billion won (approximately $1.75 billion), leaving around 2,800 customers unable to access their funds after withdrawals were halted mid-2023.
Liquidation Plans and Customer Deadlines
Delio is now preparing for liquidation. Affected customers can file claims until February 21, 2025, with the first creditors’ meeting set for March 19, 2025. According to court officials, a significant portion of Delio’s customer assets was tied up in accounts with FTX, the crypto exchange that filed for bankruptcy in November 2022. This connection made it impossible for Delio to recover these funds, causing the company to suspend withdrawals on June 13, 2023.
Legal Disputes and Regulatory Actions
The company has faced substantial regulatory scrutiny. In September 2023, Delio filed a countersuit against South Korean authorities, accusing them of misinterpreting cryptocurrency laws. The move came after the Financial Intelligence Unit (FIU) recommended firing Delio’s CEO, Jeong Sang-ho, and imposed a 1.83 billion won fine ($1.34 million) along with a temporary suspension of Delio’s business license.
Delio, established in 2018, achieved notable milestones, including becoming the first Korean cryptocurrency company to earn Virtual Asset Service Provider (VASP) status in 2022. In an effort to resolve its financial woes, Delio proposed forming a new entity to take on its debts in June 2024, hoping to attract buyers interested in VASP credentials.
Meanwhile, CEO Jeong Sang-ho is on trial for charges of fraud, embezzlement, and breach of trust. He has defended the platform in court, arguing that customer deposits were never guaranteed under a “principal-protected” model.
Fallout for Sister Company Haru Invest
The bankruptcy has also deeply impacted Haru Invest, Delio’s sister company. Haru Invest shut down operations on the same day Delio filed for bankruptcy. The company had filed a lawsuit against B&S Holdings on June 14, 2023, accusing the firm of submitting false management reports. On November 20, 2024, Haru Invest was officially declared bankrupt.
Earlier this year, Haru Invest CEO Hugo Hyungsoo Lee was attacked by a disgruntled investor during bankruptcy proceedings in August 2024. Additionally, Lee and two other executives were arrested in February 2024 on charges of fraud and embezzlement.
The collapse of Delio and Haru Invest highlights the ongoing risks within the cryptocurrency sector. For thousands of customers, the fallout has been a harsh reminder of the importance of thorough due diligence when entrusting funds to virtual asset platforms.
