South Korean crypto-lending firm Delio has reportedly expressed concerns about whether it can continue to provide regular services to clients after its assets were seized by the local financial regulator.
On the July 22nd blog post translated from Korean, Delio said the ongoing legal battle with depositors and the July 18 search and seizure of the company’s assets led to the FSC seizing “all assets owned by customers and the company, as well as other wallets and ledgers.”
Delio explained that the recent actions have made it difficult for the firm to provide normal services, adding that there is also a need to prevent the dissipation of Delio’s assets in the interest of depositors.
Delio suspended interest payments for users of its deposits and vaults as of July 24, according to the post. The firm added that services that require additional expenses, such as interest payments or operating costs, have been suspended.
June 14. Delio suddenly stopped withdrawals and deposits on its platform “to safely protect the assets of customers currently in custody” — from market volatility caused by stop deposits and withdrawals at sister credit company Haru Invest.
He had Haru Invest himself stopped withdrawals on June 13 after an investigation revealed that some of the information provided by its parcel operator B&S Holdings was false. Next day, Haru Invest announced that it was launching own legal proceedings against B&S holdings.
Notice of suspension
As a result of the recent suspension of digital asset deposits and withdrawals on Haru Invest, there has been a rapid increase in market volatility and a state of confusion among investors.
To ensure the preservation of our customers’ assets,…
– Delio Global | Web3.Crypto (@happydelio) June 15, 2023
Three days later, on June 17, Delio CEO Jung Sang-ho explained that the firm would resume withdrawals, but gave no timeline for when the platform would return to full functionality. On June 27, the company reopened withdrawals for some of its staking services.
However, according to June 30 message from Digital Asset, the move did not stop the FSC from launching an investigation and later suing Delio over the sudden suspension of withdrawals.
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The FSC has sued Delio for fraud, misappropriation and breach of trust over the June 14 “unilateral decision” to suspend user deposits and withdrawals. In addition, its CEO Jeong Sang-ho and others were banned from leaving the country.
Founded in 2018, Delio is one of South Korea’s largest cryptocurrency lending platforms, offering a wide range of escrow, lending and betting services. According to the firm’s website, it holds approximately $1 billion in bitcoins (BTC), $200 million in Ether (ETH) and approximately $8.1 billion in altcoins.
Cointelegraph reached out to Delio for comment, but did not receive an immediate response.
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