South Korean cryptocurrency lending firm Delio is facing uncertainty in its ability to provide regular services to clients due to its assets being seized by a local financial regulator.
In a blog post on July 22, Delio revealed that an ongoing legal battle with depositors and a search and seizure operation on July 18 by the South Korean Financial Services Commission resulted in the confiscation of all assets belonging to customers and the company, including cold wallets and ledgers.
As a consequence of these actions, Delio has found it challenging to maintain normal operations and expressed the need to safeguard the interests of depositors and prevent the scattering of its property.
Consequently, the company has suspended interest payments for deposit and vault users since July 24.
Moreover, services that incur additional expenses, such as interest payments and operational costs, have also been suspended.
The troubles for Delio began when it suddenly suspended withdrawals and deposits on June 14. The decision was taken to safeguard customers’ assets amidst market volatility caused by the halting of transactions at Haru Invest, its sister lending company.
Haru Invest itself had suspended withdrawals on June 13 after discovering false information provided by its consignment operator B&S Holdings. Subsequently, it initiated legal proceedings against B&S Holdings.
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Although Delio CEO Jung Sang-ho announced that withdrawals would resume, a specific timeline for restoring full functionality to the platform was not provided.
While withdrawals for some staking services were reopened on June 27, the South Korean Financial Services Commission continued its investigation and filed a lawsuit against Delio on June 30.
The lawsuit alleges fraud, embezzlement, and breach of trust in relation to the unilateral decision to suspend user deposits and withdrawals on June 14.
Additionally, Delio’s CEO Jeong Sang-ho and others were banned from leaving the country as part of the legal actions.
Delio, established in 2018, is a prominent crypto lending platform in South Korea, offering a wide range of custody, lending, and staking services.
According to the company’s website, it holds approximately $1 billion in Bitcoin, $200 million in Ether, and roughly $8.1 billion in altcoins.
When contacted for comment, Delio did not provide an immediate response.
The situation remains uncertain for the firm as it faces legal challenges and asset seizures, raising concerns over its ability to continue offering regular services to its clients.
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