The FSC has filed charges of fraud, embezzlement, and breach of trust against Delio.
Haru Invest, a subsidiary of Delio, halted deposits and withdrawals on June 13.
As of June 30th, the South Korean Financial Services Commission (FSC) is reportedly looking into crypto lending company Delio, as reported by the local news portal Digital Asset. The FSC has filed charges of fraud, embezzlement, and breach of trust against Delio due to the company’s June 14 decision to temporarily halt customer deposits and withdrawals.
Delio CEO Jung Sang-ho said the company will restart withdrawals at a special stockholders’ meeting on June 17. The business started accepting withdrawal requests for certain of its staking services on June 27.
Prevented from Leaving Country
To make up for it, Delio will obtain as much capital as possible to compensate, Sang-ho promised. With an estimated $1B in Bitcoin and $8.1 billion in other cryptocurrencies, Delio is presently one of the top crypto lenders in South Korea. Prosecutors are apparently conducting an inquiry, and in the meanwhile have ordered that the company’s CEO and top executives be prevented from leaving the country.
Haru Invest, a subsidiary of Delio, halted deposits and withdrawals on June 13 due to a problem with a “consignment operator.” Delio followed suit the next day, perhaps owing to counterparty exposure. According to reports, most of Haru Invest’s employees have been let off since the news. The firm is reportedly suing its former service provider at the moment.
The country’s Financial Intelligence Unit oversees Delio as a registered VASP (virtual asset service provider). According to industry reports, however, Haru Invest is not a VASP and is not subject to oversight. Allegedly, just before suspending withdrawals, Delio’s management denied any involvement with Haru Invest.