Delio may be forced to close its operations fully.
Delio, a key player in the South Korean cryptocurrency lending market, struggles to maintain regular operations.
The firm's ability to continue providing usual services to its customers is in doubt after the Financial Services Commission (FSC), a local regulatory authority, seized its assets.
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According to the blog post issued by the firm on July 22nd, the company is currently dealing with legal issues involving depositors. The search and seizure operation conducted by the FSC on July 18th led to the confiscation of all company and customer-owned assets.
Delio has reported that these enforcement actions made it difficult for them to continue normal operations.
To protect the interests of its depositors, Delio highlighted the importance of preventing the distribution of its assets. In response to the seizure, the company had to suspend interest payments for its deposit and vault users starting July 24th. It also halted services involving additional costs, such as operational expenses.
On July 14th, Delio suspended withdrawals and deposits on its platform to protect customers' assets from market volatility. The move followed similar actions by Haru Invest, another lending company.
Delio's CEO, Jung Sang-ho, announced on June 17th that the company would resume withdrawals but did not give a timeline for when services would be fully restored. On June 27th, withdrawals were reopened for some staking services.
Despite these measures, the FSC began investigating Delio and sued the company over the sudden suspension of withdrawals. The FSC accused Delio of fraud, embezzlement, and breach of trust about user deposits and withdrawals halt on June 14th. CEO Jeong Sang-ho and others were also banned from leaving the country.
The ongoing legal and regulatory challenges faced by Delio highlight the complexities and potential risks of operating within the rapidly evolving cryptocurrency market.