South Korean cryptocurrency firm Delio is strategizing a major move amidst a $180 million embezzlement scandal, as reported by Chosun Daily. The company plans to establish a fresh entity to absorb its debts, while it aims to sell off its current operations to repay creditors.
Delio initially garnered investments by promising substantial annual returns on deposits of cryptocurrencies such as Bitcoin and Ethereum. However, in June 2023, the company abruptly ceased its services, triggering significant financial losses for its investors.
The cessation sparked allegations of fraud and embezzlement against CEO Jung Sang-ho, who stands accused of misappropriating approximately 250 billion won from nearly 2,800 investors between August 2021 and June 2023. Legal ramifications ensued, with Jung indicted for fraud under economic crime laws and violating financial information regulations. Despite avoiding arrest, ongoing legal proceedings have severely impacted the company’s functioning and reputation.
In response to these challenges, Delio unveiled a plan on June 20 to transfer its debts to a newly formed entity. The strategy involves creating a debt-free Delio by selling its operational assets to a buyer requiring virtual asset service provider (VASP) capabilities. Proceeds from this sale will then be channeled into the new entity managing the debts.
Delio anticipates executing this restructuring by July 2024, with hopes of stabilizing its operations amidst the ongoing legal and financial turbulence.
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