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South Korean cryptocurrency lending company Delio is currently under investigation by the country’s Financial Services Commission (FSC) as of June 30, according to a report by local news outlet Digital Asset. The Commission alleges fraud, embezzlement and breach of trust related to the unilateral decision to suspend user deposits and withdrawals on June 14th.
During an EGM on June 17, Jung Sang-ho explained that the firm would resume withdrawals, although there was no fixed schedule at the time. On June 27, the company began opening withdrawals for part of its betting services.
“[Делио] receive as much capital as possible to compensate,” Sang-ho said. Delio is currently one of the largest cryptocurrency lenders in South Korea, holding approximately $1 billion in Bitcoin (BTC), $200 million in Ether (ETH), and $8.1 billion in various altcoins. Its CEO and management staff are reportedly barred from leaving the country until the prosecution’s investigation is completed.
On June 13, Delio’s subsidiary, Haru Invest, suspended withdrawals and deposits, citing a “forwarding agent” problem. The move prompted Delio to do the same the next day, likely due to counterparty risk. Following this announcement, Haru Invest reportedly cut most of its staff. The company says it is currently suing its service partner.
As a Registered Virtual Asset Provider (VASP), Delio is regulated by the country’s financial intelligence unit. However, Haru Invest is reportedly not a VASP and therefore not subject to the jurisdiction of regulators. It was alleged that Delio’s management denied ties to Haru Invest shortly before their decision to suspend withdrawals.