Delio, a virtual asset company, faces bankruptcy after fraud, mismanagement, and the loss of 250 billion won in crypto assets.
Delio, a virtual asset depository company, has been declared bankrupt by the Seoul Rehabilitation Court. The court ruled on November 22, 2024, after the company could not repay its debts. This marks a significant failure for the company and its investors. Delio faced several financial problems that culminated in its failure to operate, including fraud and mismanagement.
Bitcoin was one of the virtual assets that Delio offered a service to invest in and store. Customers were supposed to manage it to make profits. However, Delio lost his funds after investing in them due to FTX bankruptcy in November 2022. This implied that Delio could not access these assets anymore.
In June 2023, Delio also decided to suspend withdrawals, which further strained customers. The court acknowledged that the company could not meet its obligations, especially because of the stoppage of activities. This led the court to rule that Delio was bankrupt. The court noted that the management of the FTX affected the customer assets in Delio’s case, and thus, they could not be recovered.
This bankruptcy is the second in connection with crypto fraud investigations. On November 20, 2024, the company that operates Haru Invest, Haru Management, was also declared bankrupt. Haru Invest stopped withdrawals in 2023. Victims of their products have sued executives of both companies.
Delio Bankruptcy Sparks Concerns Over 250 Billion Won in Lost Crypto Assets
Delio’s Chief Executive Officer Jeong Sang-ho has been accused of embezzlement and fraud. He is said to have embezzled approximately 250 billion won from investors. The filing of the bankruptcy claim is due by February 21, 2025, while creditors’ meeting will be held on March 19, 2025.
The case involves risks associated with investing in the cryptocurrency platforms. Delio and Haru Invest both claimed they would protect virtual assets. But they disappointed and the investors lost lots of money in many instances. This raises questions as to the health of the crypto industry, or more importantly, the lack of regulation thereof.
These cases highlight the need for the implementation of better regulations to govern the cryptocurrency industry. As to investors they need to be more careful and informed before investing. Also, there is need to ensure that companies that accept to take customer funds should be held responsible for proper management of the money. The collapse of Delio and Haru Invest serves as a reminder of the volatility and risks of investing in virtual assets.
