Delio CEO Sentenced to 15 Years in South Korea Over $50M Crypto Fraud

The CEO of bankrupt South Korean crypto lending platform Delio has been sentenced to 15 years in prison after being convicted in a cryptocurrency fraud case involving roughly $50 million and more than 1,100 victims.

The executive, identified only by his surname Jeong, received the sentence from the Seoul Southern District Court, according to a Thursday report from South Korean news outlet Newsis.

Delio operated a crypto deposit service that accepted assets including Bitcoin (BTC) and Ether (ETH) while offering customers high yields on their holdings. However, the company abruptly suspended withdrawals on June 14, 2023, preventing customers from accessing their deposited crypto assets.

The court said Jeong fraudulently obtained a virtual asset trading license while operating Delio and deceived customers out of approximately 70 billion won ($50 million) worth of cryptocurrency.

Prosecutors had sought a 20-year prison term for Jeong. However, the court excluded a significant portion of the prosecution's evidence because of procedural issues raised by his defense team. Jeong had initially faced allegations involving around 2,800 victims, considerably more than the number ultimately recognized in the case. His lawyers are reportedly expected to appeal the 15-year sentence.

Delio was declared bankrupt in November 2024, more than a year after freezing customer withdrawals.

The Delio crypto fraud case adds to a string of major cryptocurrency scandals involving South Korean companies and executives. Terraform Labs co-founder Do Kwon became one of the country's most prominent crypto figures following the May 2022 collapse of the TerraUSD (UST) algorithmic stablecoin and Luna ecosystem, which erased approximately $40 billion in investor wealth.

Also in 2022, seven executives of South Korean crypto exchange V Global received prison sentences over a $1.7 billion fraud scheme. Former V Global CEO Lee Byung-gul was handed a 22-year prison term, highlighting South Korea's continuing legal crackdown on large-scale cryptocurrency fraud.