Regulatory Investigation Targets South Korean Crypto Lender Delio
South Korea-based Delio is currently under scrutiny as the country's Financial Services Commission (FSC) investigates the crypto lending firm for alleged fraud, embezzlement, and breach of trust.
According to reports from local news outlet Digital Asset, the investigation sprouts from Delio's unilateral decision to suspend users' deposits and withdrawals on June 14, raising concerns among investors.
The FSC is examining the circumstances surrounding the decision, including the alleged fraudulent practices and breach of trust by Delio.
The company's management is also under scrutiny for denying any connection or exposure to its troubled sister lending firm, Haru Invest, before the suspension.
During an extraordinary investors' meeting held on June 17, Delio's CEO, Jung Sang-ho, announced that the firm would gradually resume withdrawals, without providing a fixed schedule.
Partial withdrawals for some of its staking services commenced on June 27, as Delio sought to assure investors of its commitment to securing capital for compensation.
Delio, known as one of South Korea's prominent crypto lenders, holds substantial assets, including an estimated $1 billion in Bitcoin (BTC), $200 million in Ethereum (ETH), and $8.1 billion in various altcoins.
However, the ongoing investigation has resulted in restrictions placed on the CEO and management staff, preventing them from leaving the country while prosecutors conduct their inquiries.
The investigation also casts a shadow on Delio's sister firm, Haru Invest, which suspended withdrawals and deposits on June 13, citing issues with a "consignment operator."
Reports attributed the suspension to fraudulent management reports provided by its operating partner, B&S Holdings (formerly Aventus).
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