South Korea’s Financial Services Commission (FSC) has launched an investigation into Delio, a leading cryptocurrency lending firm. Here are the details…
Cryptocurrency platform investigation
The FSC is reportedly investigating allegations of fraud, embezzlement, and breach of trust related to Delio’s June 14 decision to unilaterally suspend users’ deposits and withdrawals. The investigation was launched after numerous complaints and concerns raised by affected users and investors. The Financial Information Analysis Institute (FIU), a branch of the FSC, is diligently working to gather evidence, including Delio’s crypto asset management and financial records. In addition, on-site investigations continue to shed light on the company’s activities.
Delio, which has already been subject to a separate investigation by the prosecution, now faces a multifaceted investigation involving both regulatory and legal authorities. Several members of Delio’s management team, including CEO Jeong Sang-ho, were barred from leaving the country as a result of criminal complaints filed by aggrieved users following the suspension of deposits and withdrawals. It is worth noting that Delio falls within the regulatory scope of the FIU due to its status as a crypto-asset service provider (VASP). Therefore, it is obliged to comply with the regulatory measures and oversight implemented by the FIU.
Problems also arose for Haru Investments
This investigation follows a similar incident involving Haru Investments, another crypto asset management firm that suspended withdrawals just a day before Delio’s move. cryptocoin.com As we reported, Delio initially denied any involvement with the incident, apparently in an attempt to distance himself from any connection with Haru. But a day later, the company admitted that it had indeed invested crypto assets in Haru. It is worth noting that although Haru, unlike Delio, is not registered with the government as a VASP, Delio’s management team is also facing legal action. This highlights the seriousness of the authorities in addressing the alleged misconduct.
As the cryptocurrency industry is subject to increased scrutiny and regulation globally, South Korea is also actively working to implement stricter measures to protect investors and promote transparency. The ongoing investigation into Delio is a reminder of the challenges regulators face in maintaining the integrity of the crypto ecosystem. As the investigation progresses, those in the South Korean cryptocurrency market will be watching developments closely, hoping for a solution that safeguards user funds and strengthens confidence in the industry. The outcome of this lawsuit will undoubtedly have broader implications for the framework regulating cryptocurrency-related activities in the country.
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