Delio CEO Jeong Sentenced to 15 Years for Embezzlement

On Aug. 13 the Seoul Southern District Court sentenced Delio CEO Jeong Sang-ho to 15 years in prison and ordered his immediate detention, citing a risk of flight. Prosecutors had sought a 20-year term.

Judges found Jeong diverted roughly 70 billion won in customer cryptocurrency assets and secured Delio’s registration as a virtual asset service provider using false documents. An accounting report submitted for the registration overstated the company’s coin holdings by about 47.6 billion won.

The court found Jeong promoted services Delio lacked the capacity to provide. The conviction rested on fallback charges covering about 1,100 victims and the 70 billion won figure.

Jeong was acquitted on a larger allegation involving roughly 250 billion won from about 2,800 customers after judges ruled key server data had been obtained illegally. The court concluded investigators did not protect Delio’s right to participate in the search or provide a list of seized items, which made the database-derived evidence inadmissible. He was also cleared on allegations concerning 41 additional victims for lack of supporting evidence.

Delio operated as a deposit and lending platform that accepted bitcoin, ethereum and other tokens in exchange for interest payments. The platform froze withdrawals in June 2023, leaving thousands of users unable to access funds. Investigators reported Delio had placed customer assets with outside counterparties that suffered losses tied to the 2022 collapse of the FTX exchange.

Delio was declared insolvent in November 2024 and entered liquidation to sell assets and distribute any recovered funds to creditors. The scale of possible recoveries for depositors remains unclear; the liquidation process will determine what, if any, funds are returned. Creditors and investors will watch the liquidation and any appeal by Jeong.

South Korea’s Virtual Asset User Protection Act, which took effect in 2024, imposes stricter rules on custody, transparency and customer protections for virtual asset service providers. Regulators, creditors and market participants are expected to observe how the Delio liquidation and related appeals proceed under the new regulatory framework.