Delio CEO Sentenced to 15 Years in Prison Over Crypto Platform Collapse
The Seoul Southern District Court has sentenced Delio chief executive Jeong Sang-ho to 15 years in prison for his role in the collapse of the South Korean cryptocurrency deposit platform. The sentence falls five years short of the term sought by prosecutors.
Court Upholds Partial Charges Amid Procedural Challenges
Criminal Division 11, led by Judge Jang Chan, delivered the ruling on Thursday afternoon, according to local outlet Newsis. The court found Jeong guilty on a portion of the prosecution’s original case, primarily on a set of revised charges filed later. This decision stemmed from procedural issues, as Jeong’s legal team successfully argued that a search and seizure conducted at Gabia, the company hosting Delio’s servers, was unlawful. The court agreed, stating that prosecutors had failed to guarantee Delio’s right to participate in the search and had not provided a list of seized items. Consequently, the court ruled that the platform’s database and any information derived from it lacked evidentiary value.
Reduced Victim Count and Financial Impact
This procedural ruling significantly altered the indictment, which had accused Jeong of defrauding approximately 2,800 individuals of about 250 billion won (roughly $176 million) in cryptocurrency between August 2021 and June 2023. The case that proceeded focused on a reserve claim, involving around 1,100 victims and approximately 70 billion won (or $49 million). Prosecutors had added this claim as a contingency after the initial evidence was challenged. Jeong was acquitted of charges related to 41 additional victims for whom no evidence was presented.
Falsified Records and Dishonest Licensing
Jeong was also convicted of registering Delio as a virtual asset service provider using a falsified accounting firm report. Prosecutors alleged this report overstated the company’s coin holdings by about 47.6 billion won (roughly $34 million). The court stated that Jeong obtained his license dishonestly and took more than 70 billion won from customers. Judges added that Jeong had promoted Delio as a cryptocurrency bank despite lacking the operational capacity and had evaded responsibility by attributing his failure to return customer assets to bankruptcy.
Mitigating Factors and Verdict Delay
In considering the sentence, the court acknowledged that external factors had contributed to the platform’s collapse and noted that Jeong had no prior convictions carrying penalties beyond a fine. The verdict was originally scheduled for July 16 but was postponed after Jeong’s legal team raised the evidence issue, prompting the court to reopen arguments. Prosecutors subsequently filed the narrower, fallback charges in anticipation that the server material might be excluded, which ultimately occurred.
Delio’s Operations and Bankruptcy
Delio had offered high interest rates on deposits of Bitcoin, Ethereum, and other tokens, positioning itself as a digital asset bank. The platform abruptly halted withdrawals in June 2023. It suspended its services in August of the same year after failing to secure court approval for operational costs, including web hosting. Delio was declared bankrupt in November 2024.
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