According to a report by local news outlet Digital Asset, South Korean crypto lending firm Delio has been under investigation by the country’s Financial Services Commission (FSC) since June 30. The Commission alleges fraud, embezzlement and breach of trust related to Delio’s unilateral decision to suspend users. ‘ deposits and withdrawals on June 14.
During an extraordinary meeting of investors on June 17, Jung Sang-ho explained that the company would resume withdrawals, but without a fixed timetable at the time. On June 27, the company began opening withdrawals for some of its staking services.
“(Delio) will get as much capital as possible to compensate,” Sang-ho said. Delio is currently one of South Korea’s largest crypto lenders, holding around $1 billion in Bitcoin (BTC), $200 million in Ether (ETH), and $8.1 billion in various altcoins. Its CEO and management staff have reportedly been banned from leaving the country pending an investigation by prosecutors.
On June 13, Delio’s sister company Haru Invest suspended withdrawals and deposits, citing a problem with a “consignment operator”. This move prompted Delio to do the same the next day, likely due to exposure to the counterparty. Since the announcement, Haru Invest has reportedly cut most of its staff. The company says it is currently taking legal action against its service partner.
As a Registered Virtual Asset Provider (VASP), Delio is regulated by the country’s Financial Intelligence Unit. However, Haru Invest would not be a VASP and would therefore not fall under the jurisdiction of regulators. It has been alleged that Delio management denied any exposure to Haru Invest shortly before its decision to suspend withdrawals.
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