Jeong, CEO of bankrupt crypto lender Delio, sentenced to 15 years after defrauding 1,100 investors of $50M. Withdrawals halted June 2023; court cited procedural issues. Appeal expected.
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The CEO of bankrupt South Korean crypto lending platform Delio has been sentenced to 15 years in prison. The Seoul Southern District Court convicted him on fraud charges involving roughly $50 million and more than 1,100 victims, according to a Thursday report from Newsis.
The executive, identified only by his surname Jeong, ran Delio's deposit service. It accepted assets including Bitcoin (BTC) and Ether (ETH) while offering high yields to customers. On June 14, 2023, the company abruptly suspended withdrawals. Customers could no longer access their deposited crypto.
The court said Jeong fraudulently obtained a virtual asset trading license while operating Delio. He deceived customers out of approximately 70 billion won ($50 million) worth of cryptocurrency.
Prosecutors had sought a 20-year prison term. The court excluded a significant portion of the prosecution's evidence because of procedural issues raised by Jeong's defense team. Initial allegations involved around 2,800 victims, considerably more than the number ultimately recognized in the case. Jeong's lawyers are expected to appeal the 15-year sentence, the report said.
Delio was declared bankrupt in November 2024, more than a year after freezing customer withdrawals.
The Delio 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 after the May 2022 collapse of the TerraUSD algorithmic stablecoin and Luna ecosystem. That collapse erased approximately $40 billion in investor wealth.
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. The sentences highlight South Korea's continuing legal crackdown on large-scale cryptocurrency fraud.
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