According to local report, South Korean crypto lending platform Delio has been declared bankrupt. Delio, which owes its customers approximately 245 billion won ($1.75 billion), halted withdrawals in mid-2023, leaving about 2,800 customers unable to access their funds. 
<h3 class="wp-block-heading" id="span-style-font-weight-400-court-has-ordered-delio-s-liquidation-following-ftx-s-collapse-span">Court has ordered Delio’s liquidation following FTX’s collapse</h3> 
A Seoul court has ordered liquidation proceedings for<a href="https://www.digitalasset.works/news/articleView.html?idxno=23548" rel="nofollow noopener" target="_blank"> Delio</a>, offering a glimmer of hope for affected customers. Creditors can file claims until February 21, 2025, with the first creditors’ meeting scheduled for March 19, 2025. 
A court official reportedly stated: 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 The debtor leased and entrusted the management of customer-deposit virtual assets to the management company, but a large part of it was deposited and managed in the FTX account. <cite>Court official</cite>
</blockquote> 
Most of Delio’s customer deposits were managed through an FTX account. This is a critical hurdle since the company could not recover its assets following FTX’s collapse in November 2022. Following this chain of occurrences, the crypto lending platform has been unable to meet customer withdrawal requests after June 13, 2023. 
Delio has faced a series of legal challenges. In September 2023, the company countersued South Korean regulators, claiming misinterpretation of laws, after the Financial Intelligence Unit (FIU) recommended the dismissal of CEO Jeong Sang-ho and imposed a 1.83 billion won ($1.34 million) fine. The company’s business license was also temporarily suspended. 
<h3 class="wp-block-heading" id="span-style-font-weight-400-delio-and-haru-invest-highlight-risks-as-their-failures-leave-customers-struggling-span">Delio and Haru Invest highlight risks as their failures leave customers struggling</h3> 
Founded in 2018, Delio was the first South Korean crypto firm to achieve Virtual Asset Service Provider (VASP) status from the FIU in 2022. Earlier this year, the company <a href="https://biz.chosun.com/stock/finance/2024/06/20/5CX3QA3B7RHWVM7Q72GNQ2ZUBM/?utm_source=naver&amp;utm_medium=original&amp;utm_campaign=biz" rel="nofollow noopener" target="_blank">proposed</a> creating a new entity to take on its debts and attract a buyer seeking VASP credentials. 
Jeong Sang-ho, currently on trial for fraud, embezzlement, and breach of trust, has argued that deposits on Delio’s platform were not protected as “principal-guaranteed.” 
Delio’s sister company, Haru Invest, ceased operations on the same day as Delio and was declared bankrupt on November 20, 2024. Haru had sued its consignment operator, B&amp;S Holdings, in June, alleging the submission of falsified management reports. 
Haru Invest’s CEO, Hugo Hyungsoo Lee, was stabbed by an angry customer during bankruptcy proceedings in August. The frustrated investor stabbed Lee multiple times in the neck before being subdued by the security personnel. The attacker, a man in his 40s, was reportedly one of the 16,000 victims of Haru Invest’s bankruptcy. 
Earlier this year, Lee and two other executives were arrested on charges related to fraud and embezzlement. According to prosecutors, Lee and his colleagues allegedly embezzled $826 million from their users between March 2020 and June 2023.&nbsp; 
Land a High-Paying Web3 Job in 90 Days: <a href="https://www.cryptopolitan.com/crypto-career-launchpad-waitlist/?utm_source=cryptopolitan&amp;utm_medium=banner&amp;utm_campaign=ccl-waitlist-2" target="_blank">The Ultimate Roadmap</a>

South Korean crypto platform Delio declared bankrupt, owing $1.75 billion

Table of Contents

Cryptopolitan_News

Other articles published on Nov 23, 2024

Toncoin Rises to $5.5 as Bithumb Listing Sparks Price Rebound Hopes

Crypto News Today: Will Ripple vs SEC Lawsuit End After Gary Gensler’s Exit?

DOGE and SHIB Gains Attention as Charts Show Parabolic Spikes Ahead for Both Altcoins, $10 DOGE ATH?

The Big Three: Why Qubetics, EOS, and Celestia Are Leading the Pack in 2024

What Is Yuri AI Crypto? Exploring the Intersection of AI and Blockchain

Altseason Has Begun-XLM, ALGO & AVAX Prices Trigger a Massive Surge as Bitcoin Consolidates

Join our free newsletter for daily crypto updates!