Delio CEO gets 15 years after platform collapse
South Korea’s crypto enforcement push has produced another severe punishment. On Aug. 13, the Seoul Southern District Court sentenced Delio CEO Jeong Sang-ho to 15 years in prison for defrauding customers of roughly 70 billion won (about $49.2 million) in virtual assets, according to News.Bitcoin.com and The Block.
Delio, which operated as a digital asset bank offering high interest, froze customer withdrawals in June 2023 after suffering losses linked to the 2022 FTX collapse, according to Cointelegraph. The company was declared insolvent in November 2024, initiating liquidation proceedings for creditors, according to News.Bitcoin.com. The company later officially declared bankruptcy, leading to Jeong’s indictment in April 2025, Cointelegraph reported.
Delio had promoted high returns on crypto deposits before its collapse, according to The Block.
The verdict
Prosecutors had originally sought a 20-year prison sentence under South Korea’s Act on Aggravated Punishment, according to crypto.news. The court instead handed down a 15-year sentence after convicting Jeong of embezzling customer assets and submitting false registration documents. The judge found that Jeong falsely obtained a virtual asset trading license and defrauded victims of approximately 70 billion won [$49.3 million] in virtual assets, according to Cointelegraph.
What the court said
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 also said: “Numerous victims have suffered significant economic damage due to this case, which is difficult to recover.”
Acquittal on the larger charge
The 15-year sentence covers a smaller set of charges than prosecutors originally pursued. The judge acquitted Jeong on a primary charge involving 250 billion won ($175.6 million) from about 2,800 people, according to The Block. The primary charges were voided due to unlawfully obtained evidence from server host Gabia, according to Decrypt. Jeong was convicted on fallback charges covering roughly 1,100 victims and 70 billion won, Decrypt reported. He was also convicted of registering as a virtual asset service provider using a falsified accounting report.
The acquittal was a technical decision rather than a finding that the larger allegation was false. Police had obtained server data from Gabia, and the court deemed the search and seizure unlawful. That rendered the larger charge unsupported, leaving the fallback claims that produced the 15-year sentence.
Wider South Korean regulatory pressure
The case echoes other high-profile South Korean crypto scandals, such as Terraform Labs co-founder Do Kwon’s recent legal troubles, according to Cointelegraph. It also lands as South Korea tightens controls around crypto moving offshore. South Korea’s Cabinet approved amendments on Aug. 11 requiring stricter anti-money-laundering monitoring for crypto transfers to overseas platforms and private wallets, according to CoinCentral. Transfers of 10 million won or more will face mandatory reporting to the Korea Financial Intelligence Unit. The 1 million won threshold for the crypto Travel Rule is being completely removed, requiring sender and recipient data for transfers of all sizes. The new overseas-transfer provisions will take effect six months after promulgation. The changes follow restrictions on foreign exchange apps including Bybit and OKX from new installations on South Korea’s Google Play Store.
The app-store restrictions mean certain offshore exchange apps can no longer be newly installed by local users. Combined with the transfer-reporting rules, the measures aim to make it harder for South Korean investors to move crypto to platforms outside the country’s regulatory perimeter.
Bottom line
For Delio’s customers, the sentence may do little to recover lost assets. The court itself acknowledged the damage: “Numerous victims have suffered significant economic damage due to this case, which is difficult to recover.” The ruling nevertheless signals that South Korean courts are willing to impose long sentences on executives whose platforms contribute to widespread investor losses.
