South Korean lending platform Delio faces operational disruption after assets seized

Delio is currently under investigation by Korea's FSC.

Delio, a South Korean digital asset savings and loan company, has fallen into a deeper crisis after suspending user withdrawals for more than a month. Authorities seized Delio's assets on July 18, reportedly disrupting its operations.

According to the latest news, the South Korean regulator’s actions made it “difficult for the company to provide normal services,” and it also emphasized the need to prevent the fragmentation of platform assets for the benefit of depositors.

In a notice (translated from Korean), Delio expressed concerns about its ability to function normally after South Korea’s Financial Services Commission (FSC) confiscated all assets owned by customers and companies, as well as other cold wallets and ledgers.

Delio is a major player in the Korean cryptocurrency ecosystem.

The lender temporarily halted withdrawals from June 14, citing heightened market volatility and confusion among investors at sister lender Haru Invest, which had halted deposits and withdrawals the previous day.

Delio further stated that its focus is on protecting client assets in its custody, adding that withdrawals will remain suspended until the issue is resolved.

A few days later, Delio CEO Chung Sang-ho revealed that the lending platform would resume withdrawals. No further timetable for the suspension of services was disclosed.

The decision to abruptly halt withdrawals has sparked a community backlash while the Financial Services Commission launched an investigation into the firm's activities over allegations of fraud, embezzlement and breach of trust.