Crypto lender Delio warns normal operations at risk after asset seizure

South Korean crypto lending company Delio has reportedly raised concerns about whether it can continue to provide normal services to customers after its assets were frozen by the local financial regulator.

In the blog of July 22 Post Translated from Korean, Dalio said that as a result of the ongoing legal battle with depositors and the search and seizure of the company’s assets on July 18, “all assets owned by customers and the company, as well as other cold wallets and ledgers,” were seized by the FSC.

Dalio explained that the recent actions make it difficult for the company to provide normal services, as well as the need to prevent the dispersion of Dalio’s assets in the interest of depositors.

According to the post, Delio suspended interest payments for its deposits and Vault users until July 24. The firm said that services that require additional expenses, such as interest payments or operating expenses, have been suspended.

On June 14, Delio abruptly halted withdrawals and deposits on its platform in order to “safely protect customer assets currently in custody” – from market volatility caused by freezing deposits and withdrawals at sister lending company Haru Invest.

Haru Invest halted withdrawals on June 13 after an investigation revealed that some information provided by its consignment operator B&S Holdings was false. The next day, Haru Invest announced that it was launching its own legal proceedings against B&S Holdings.

Withdrawal Suspension Notice

The recent suspension of digital asset deposits and withdrawals at Haru Invest resulted in a sharp increase in market volatility and panic among investors.

In order to ensure the protection of the assets of our valued customers,…

– Delio Global | Web3.Crypto (@happydelio) 15 June 2023

Three days later on June 17, Delio CEO Jung Sang-ho revealed that the company would resume withdrawals, but did not give a timeline for when full functionality would return to the platform. On June 27, the company reopened withdrawals for some of its staking services.

However, as of June 30 reports From Digital Asset, this move has not stopped the FSC from launching an investigation and subsequently suing Delio on the basis of the sudden suspension of withdrawals.

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On June 14, the FSC sued Dalio for fraud, embezzlement and breach of trust related to a “unilateral decision” to suspend user deposits and withdrawals. Additionally, its CEO Jeong Sang-ho and others were banned from leaving the country.

Established in 2018, Delio is one of the largest crypto lending platforms in South Korea, offering a wide range of custody, loan and staking services. According to the firm’s website, it holds about $1 billion in bitcoin (BTC), $200 million in ether (ETH), and about $8.1 billion in altcoins.

Cointelegraph reached out to Dalio for comment but did not receive an immediate response.

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