How South Korean Bitcoin Lender Delio is Impacting the Web 3.0 Crypto Business

South Korean Bitcoin Lender’s Administrative Lawsuit

Delio, a South Korean Bitcoin (BTC) lender, is reportedly preparing to file an administrative lawsuit against regulators for incorrectly interpreting the law, leading to an investigation and a hefty fine against the crypto lending firm.

Delio has stated that the allegations of fraud and embezzlement brought by the Financial Service Committee (FSC) are unfounded, according to a report published in a local daily. The crypto lender claimed that the regulator had applied the law unreasonably in a situation where there were no clear regulations for virtual asset deposit and management products.

The report revealed that the Financial Intelligence Unit (FIU) recommended the dismissal of Delio CEO Jeong Sang-ho through a sanctions announcement on Sept. 1. Delio has alleged that this was a clear sign that the financial authorities were trying to shut down the business instead of giving it a chance to revive. The FIU also imposed a three-month business suspension on Delio and a fine of 1.83 billion Korean won ($1.34 million).

The firm has also warned that the assets seized by regulators could put its operations at risk.

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Impact of Web 3.0 on Financial Authorities

Sang-ho stated that the FIU sanctions leave much room for ambiguous legal interpretation and inconsistent application, which could be detrimental to the domestic virtual asset industry.

The main point of contention remains the interpretation of the current laws, such as whether a lending company that lends cash using virtual assets as collateral is considered a virtual asset business operator and whether the imposition of a lock-up is “storage” of virtual assets under the Special Financial Services Act.

Delio argued that it is unclear whether virtual asset deposits and management products are considered financial products in accordance with the existing law. One of the lawyers for the firm pointed out that there are no provisions for virtual asset-related laws and regulations concerning the virtual asset management business.

The lawyer said that the FIU had erroneously interpreted virtual asset deposits and management products as financial investment products and sanctioned them, which is not in line with the law.