A Seoul court has sentenced Delio CEO Mr. Jeong to 15 years in prison for defrauding more than 1,100 investors of approximately ₹70,000 crore ($50 million) in crypto assets. According to reports from Newsis, the Seoul Southern District Court convicted Jeong on charges including fraud, embezzlement, and use of false documents in Delio's registration as a virtual asset service provider. However, the court excluded significant evidence due to procedural deficiencies, which were brought forward by Jeong's lawyers. The sentence was five years shorter than the 20-year prison term prosecutors had requested, as the court excluded evidence collected through a botched server search after determining it had been obtained unlawfully. The verdict had originally been due on July 16, but was delayed after Jeong's team raised the evidence issue and the court reopened arguments.
Prosecutors had initially accused Jeong of misappropriating approximately ₹2,10,000 crore ($250 billion) in crypto assets from roughly 2,800 users between August 2021 and June 2023. However, a botched search of the platform's server host cost prosecutors the bulk of their case, cutting it from 2,800 alleged victims to about 1,100 victims. As reported by Newsis, the court excluded evidence collected during the server search after finding that prosecutors had not guaranteed Delio's right to participate in the search and had not handed over a list of what was seized. The court ruled that the platform's database and everything derived from it carried no evidentiary value. What survived was the reserve case, covering about 1,100 victims and roughly ₹70,000 crore ($50 million), which prosecutors had added as insurance after the evidence was challenged. Jeong was also convicted of registering Delio as a virtual asset service provider using a falsified accounting firm report, which prosecutors said overstated its coin holdings by about ₹47,600 crore ($34 million).
Delio, founded in 2018, offered returns of up to 10.7% APR on cryptocurrencies including Bitcoin, Ether and USDT, marketing itself as a digital asset bank. According to Newsis, the company halted withdrawals without warning in June 2023, citing increased market volatility, and was declared bankrupt in November 2024. The withdrawal freeze left customers unable to access funds held on the platform, with prosecutors arguing that Jeong's conduct during the disruption increased financial damage to Delio users. The company's problems emerged alongside a similar crisis at Haru Invest, another South Korean crypto yield platform that halted deposits and withdrawals in June 2023. The withdrawal halt became the central event behind the later criminal and bankruptcy proceedings as authorities examined how customer assets had been managed and whether users had been given an accurate picture of the company's financial condition.
The Delio case is part of a broader South Korean crypto platform crisis that affected multiple companies. Haru Invest also entered bankruptcy proceedings in November 2024 after investigations linked the company to alleged investor losses of about ₹11,400 crore ($1.4 billion). As reported by crypto.news, Haru had opposed bankruptcy, arguing that the process could reduce its ability to negotiate asset recovery. The financial links between Delio and Haru became part of the case, with authorities tying Delio's withdrawal problems to disruption involving Haru Invest and B&S Holdings. In August 2024, Haru CEO Hugo Hyungsoo Lee was attacked during his trial, with a victim allegedly stabbing him several times in the neck. South Korean regulators have increased scrutiny of digital asset businesses following a series of platform failures and investor losses, with cases involving customer deposits particularly sensitive because users may treat yield-bearing crypto products more like savings products than speculative trading accounts.
Judge Jang Chan ordered Jeong's detention following the ruling, citing concerns that he could flee. According to NoCut News, the court considered Jeong a flight risk and ordered his immediate detention. The 15-year prison term reflects the court's assessment of the losses linked to the charges it did uphold, despite the acquittal on the largest fraud charge. During proceedings, prosecutors had sought a 20-year prison sentence under South Korea's Act on the Aggravated Punishment of Specific Economic Crimes, while victims affected by the collapse had called for severe punishment. The court noted that outside events had contributed to the collapse and that Jeong had no previous convictions carrying a penalty above a fine. The defense lawyers are expected to appeal the sentence, and the split ruling could leave room for further legal proceedings if prosecutors challenge the exclusion of evidence or other parts of the judgment. The case illustrates how evidence handling can materially affect major cryptocurrency prosecutions and raises questions about regulatory oversight of digital asset platforms.
