South Korean Crypto Lending Company Delio Investigated by Regulators

FSC Launches Investigation into Delio

According to a report by Digital Asset, a local news source, the Financial Services Commission (FSC) of South Korea has launched an investigation into the crypto lending firm Delio as of June 30. The FSC has accused the company of fraud, embezzlement, and breach of trust due to their decision to suspend user deposits and withdrawals on June 14.

At an extraordinary investors’ meeting on June 17, Jung Sang-ho revealed that the company would be allowing withdrawals again, though no definite timeframe had been established. On June 27, the firm began allowing withdrawals for some of its staking services.

Sang-ho declared that Delio would obtain as much capital as possible to make amends. At present, Delio is one of South Korea’s biggest crypto loan providers, having an approximated $1 billion in Bitcoin (BTC), $200 million in Ether (ETH), and $8.1 billion in a variety of altcoins. The CEO and management team are said to be prohibited from leaving the nation while prosecutors are conducting an inquiry.

Haru Invest Halts Withdrawals and Deposits

On June 13, Delio’s sister company, Haru Invest, stopped allowing withdrawals and deposits due to a problem with a “consignment operator.” This prompted Delio to take similar action the following day, likely due to potential risks from its counterpart. Since the statement, Haru Invest is said to have laid off most of its personnel. The company has announced that it is taking legal action against its service partner.

As a VASP, Delio is subject to oversight from the nation’s Financial Intelligence Unit. On the other hand, Haru Invest is not a registered VASP and is thus not subject to the regulations of the authorities. It has been claimed that Delio’s management refused to do business with Haru Invest prior to its decision to halt withdrawals.

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