Delio, one of South Korea’s prominent cryptocurrency platforms, has officially filed for bankruptcy, citing a debt of $174 million. The collapse has impacted approximately 2,800 investors and sent shockwaves through the country’s financial markets.

Founded in 2018 as the first official Virtual Asset Service Provider (VASP) in South Korea, Delio’s downfall is closely tied to the FTX exchange’s 2022 collapse. A significant portion of its customer assets was managed through FTX, and when FTX dramatically went under in November 2022, Delio was unable to recover these funds. This led to a complete halt of asset withdrawals starting June 13, 2023.

Legal Troubles and CEO’s Role

Delio’s CEO, Jeong Sang-ho, is currently facing serious legal charges, including fraud, embezzlement, and breach of trust. During a court hearing in June, Sang-ho controversially claimed that customer deposits on the platform were not “principal-protected.” Following recommendations from the Financial Intelligence Unit (FIU), Sang-ho was removed from his position on September 1, 2023. His legal battles are ongoing.

Investor Compensation Timeline

The court has granted affected investors until February 21, 2025, to file claims. The first creditors’ meeting is scheduled for March 19, 2025, where decisions regarding the $174 million in customer claims will be addressed.

Haru Invest Connection

Adding to the complexity, Delio’s sibling company, Haru Invest, which ceased operations on the same day as Delio, also declared bankruptcy on November 20, 2024.

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