A South Korean court sentenced Delio's CEO to 15 years for a $50 million fraud that locked 1,100 depositors out of their crypto. The ruling adds to a string of harsh crypto fraud sentences in the country.
The CEO of South Korean crypto deposit platform Delio, identified only as Mr. Jeong, was sentenced to 15 years in prison for a fraud that cost victims roughly 70 billion won, or about $50 million, local news outlet Newsis reported Thursday.
The Seoul Southern District Court found Mr. Jeong guilty of obtaining a virtual asset trading license through false pretenses and defrauding more than 1,100 depositors. Delio accepted bitcoin and ether deposits, promising high yields. Then, overnight on June 14, 2023, it locked customers out of their funds. The platform filed for bankruptcy in November 2024.
"While operating Delio, the defendant falsely obtained a virtual asset trading license and defrauded victims of approximately 70 billion won in virtual assets," the court said in its ruling.
Prosecutors had initially sought a 20-year sentence. The court threw out a significant portion of the evidence after Mr. Jeong's lawyers raised procedural deficiencies, reducing the count of victims from the original 2,800. Defense lawyers are expected to appeal.
The Delio case is the latest in a series of crypto fraud prosecutions in South Korea. In 2022, seven executives of the V Global exchange received prison terms for a $1.7 billion fraud, with former CEO Lee Byung-gul drawing 22 years. Do Kwon, co-founder of Terraform Labs, is awaiting extradition after the collapse of the TerraUSD algorithmic stablecoin and Luna token erased roughly $40 billion in investor funds in May 2022.
The sentence reflects South Korean courts' willingness to impose long prison terms for crypto fraud, even when procedural issues force prosecutors to narrow their cases. The 15-year term, while shorter than the 20 years prosecutors sought, still places Mr. Jeong among the most severely punished crypto fraudsters in the country.
For Delio's depositors, the criminal conviction offers little immediate recourse. Bankruptcy proceedings are underway, and the court did not order restitution as part of the sentence. The 1,100-plus victims remain locked out of their funds with no clear timeline for recovery.
Mr. Jeong's lawyers have not publicly commented on their next steps, though an appeal is widely expected. If the conviction stands, South Korea's legal system will have delivered one of the longest prison terms for a crypto fraud case outside the Terra collapse.
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