Key Takeaways
- A Seoul court sentenced Delio CEO Jeong Sang-ho to 15 years in prison over fraud involving roughly 70 billion won ($49 million).
- Prosecutors had sought 20 years, after initially accusing Jeong of conduct involving about 245 billion won in customer crypto.
- Delio froze withdrawals in June 2023 and faced bankruptcy in November 2024.
Delio CEO Jeong Sang-ho has been sentenced to 15 years in prison in one of South Korea’s most closely watched crypto deposit cases, more than three years after customers were locked out of their assets.
The Seoul Southern District Court convicted Jeong of fraud and the use of false documents involving approximately 70 billion won ($49 million) and ordered his arrest, citing the seriousness of the harm to victims and the risk of flight.
The sentence came below the 20-year term sought by prosecutors, who had accused Jeong of deliberately misleading customers while Delio’s financial position deteriorated. Prosecutors originally alleged a much broader case involving roughly 245 billion won in crypto belonging to around 2,800 users.
Illegal Search Narrowed the Delio Case
The difference between the original 245 billion-won allegations and the amount covered by the conviction became one of the most important parts of the trial.
Jeong’s lawyers challenged evidence obtained during a search of Delio’s server hosting provider, arguing that investigators failed to guarantee his participation rights and did not properly provide an inventory of seized materials.
The court accepted concerns over the legality of parts of the search, forcing prosecutors to revise the indictment and introduce alternative charges ahead of sentencing.
The dispute ultimately prevented the court from simply treating the full 245 billion-won case as proven.
Delio Collapse Started With 2023 Withdrawal Freeze
Delio operated a centralized crypto lending and deposit business that allowed customers to deposit assets like Bitcoin and earn crypto-denominated interest.
That model unraveled on June 14, 2023, when Delio abruptly stopped withdrawals.
Prosecutors later alleged that customer assets had already been depleted by losses, hacking damage, and other operations, even as the company continued to attract deposits.
Withdrawal Freeze Ends in Bankruptcy and Prison Sentence
The problems are tied to the broader collapse of Korean crypto yield platforms following the failures of FTX and Haru Invest.
Delio never recovered. The Seoul Rehabilitation Court declared the company bankrupt on Nov. 22, 2024, finding that it was unable to meet its payment obligations after the withdrawal suspension and subsequent shutdown.
Jeong’s 15-year sentence now turns the long-running withdrawal crisis into a major criminal conviction, while affected Delio customers remain dependent on bankruptcy and asset-recovery proceedings for any repayment.
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Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
