South Korea jails Delio CEO for 15 years over $49M crypto fraud

South Korea has sentenced Delio CEO Jeong Sang-ho to 15 years in prison after a Seoul court found him guilty of defrauding customers of about 70 billion won ($49.2 million) in crypto assets.

According to local news outlet Newsis, the Seoul Southern District Court convicted Jeong on most of the charges against him, including fraud, embezzlement, and the use of false documents in Delio’s registration as a virtual asset service provider.

Judge Jang Chan, who presided over the case, also ordered Jeong to be detained after the ruling. NoCut News reported that the court cited concerns that he could flee.

The 15-year prison term was lower than the 20-year sentence prosecutors had requested during closing arguments earlier this year. As crypto.news previously reported in April, prosecutors had accused Jeong of misappropriating about 250 billion won in crypto assets from roughly 2,800 users between August 2021 and June 2023.

Delio CEO cleared of main 250 billion won fraud charge

While Jeong was convicted on several counts, the court acquitted him of the main indictment involving roughly 250 billion won ($175.6 million) allegedly taken from about 2,800 customers.

Newsis reported that the court excluded evidence collected during a search and seizure involving a server operator after finding that it had been obtained illegally. The evidentiary ruling meant Jeong was cleared of the largest fraud allegation brought by prosecutors.

The court nevertheless found him responsible for fraud involving about 70 billion won and largely accepted the prosecution’s case on separate embezzlement and false-document charges.

Addressing the conduct for which Jeong was convicted, the court described the offense as serious because of the number of customers involved, the financial losses and the methods used.

“The defendant committed the crime of defrauding a large sum from numerous victims, and given the methods and means employed, and the scale of the damage, the crime is extremely grave,” the court said.

Jeong had also failed to obtain forgiveness from customers who suffered substantial financial losses, the court added.

During closing arguments in April, prosecutors sought a 20-year prison sentence under South Korea’s Act on the Aggravated Punishment of Specific Economic Crimes. Prosecutors had tied the alleged misconduct to Delio’s operation of crypto deposit products and the company’s eventual withdrawal freeze.

Victims affected by the collapse had called for a severe punishment, while Jeong’s defense said during the earlier proceedings that it was prepared to address customer losses if he were acquitted.

Delio withdrawal freeze preceded the criminal case

Delio’s legal problems followed the collapse of its crypto deposit and lending business, which had marketed yield-bearing products to South Korean customers.

Founded in 2018, the company offered returns of up to 10.7% APR on cryptocurrencies including Bitcoin, Ether and USDT while presenting its services as an alternative for users seeking returns on deposited digital assets.

The platform suspended customer withdrawals in June 2023, initially citing increased market volatility. Delio said at the time that the suspension was intended to protect customer assets while it assessed the situation.

The withdrawal freeze left customers unable to access funds held on the platform. Delio said in its June 2023 statement that it would work to protect customer assets while determining the circumstances behind the disruption.

Prosecutors later argued that Jeong had engaged in deceptive promotion and misconduct connected to Delio’s operations. During the April proceedings, authorities said the alleged offenses covered a period running from August 2021 until the June 2023 suspension.

Delio’s problems emerged alongside a similar crisis at Haru Invest, another South Korean crypto yield platform that halted deposits and withdrawals in June 2023.

Authorities investigated both businesses after the freezes, while customers pursued legal action over funds trapped on the platforms. A 2024 report on Haru covered the arrest of three company executives, including CEO Hugo Lee, over allegations involving approximately 1.1 trillion won in customer crypto assets.

Prosecutors accused Haru executives of misleading customers about how deposits were managed while concentrating much of the company’s assets through a single individual.

Haru exposure became part of Delio fallout

The financial links between the companies later became part of the Delio case.

During proceedings against Jeong, authorities tied Delio’s withdrawal problems to disruption involving Haru Invest and B&S Holdings. A person surnamed Bang, who held a majority stake in B&S Holdings, was identified by authorities as a key figure connected to the withdrawal suspensions affecting the platforms.

Haru said it had suffered losses of about 350 billion won, or roughly $236 million, because of exposure connected to the collapse of FTX. Prosecutors argued during Jeong’s case that his conduct during the resulting disruption increased the financial damage suffered by Delio users.

Haru’s own criminal proceedings involved allegations on a larger scale. Prosecutors accused company executives of embezzling hundreds of millions of dollars in cryptocurrency from thousands of customers after marketing high-yield products.

The case took another turn in August 2024 when Haru CEO Hugo Hyungsoo Lee was attacked during his trial at the Seoul Southern District Court. A victim of the Haru collapse allegedly stabbed Lee several times in the neck while he was seated at the defendant’s bench, according to local reporting at the time.

Courtroom guards subdued the attacker, and Lee was taken to a hospital. He had been indicted on fraud charges earlier that year and had been released on bail before the attack.

Delio entered bankruptcy after customer losses

Legal and financial proceedings continued after Delio’s 2023 withdrawal suspension as creditors sought to recover assets.

The company was ultimately declared bankrupt in November 2024, more than a year after customers lost access to withdrawals. Jeong was later indicted in April 2025 as prosecutors moved forward with the criminal case stemming from Delio’s operations.

Haru also entered bankruptcy proceedings. In November 2024, the Seoul Rehabilitation Court declared Haru bankrupt after investigations linked the company to alleged investor losses of about 1.4 trillion won, or roughly $1 billion.

Haru had opposed bankruptcy, arguing that the process could reduce its ability to negotiate the recovery of assets associated with B&S Holdings and the FTX collapse. Creditors had initially sought corporate rehabilitation in 2023 before filing for bankruptcy in April 2024 after the earlier request was rejected.

In Jeong’s case, the Seoul Southern District Court has now ordered his detention following the 15-year sentence, with NoCut News reporting that the order was issued because the court considered him a flight risk.