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S Korea crypto platform Delio halts operations amidst regulatory investigation

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TL;DR

  • Delio, a South Korean crypto lending platform, has announced a temporary suspension of deposits and withdrawals on its platform.
  • Delio attributed this decision to the aftermath of Haru Invest, a domestic firm that had recently suspended crypto deposits and withdrawals. 
  • Some have accused Haru Invest of attempting a “rug pull” after finding its offices deserted, but the firm’s executives have denied these allegations, stating that the office closure was due to a decision to transition to remote work.

Delio, a South Korean crypto lending platform, has announced a temporary suspension of deposits and withdrawals on its platform. The move comes as financial regulators in the country initiate an investigation into the situation. Delio operates as a crypto lending service and wallet and holds an official virtual asset service provider (VASP) operating license.

Delio attributed this decision to the aftermath of Haru Invest, a domestic firm that had recently suspended crypto deposits and withdrawals. Delio claimed that Haru Invest’s actions had caused increased market volatility and confusion among investors. Delio’s CEO, Jeong Sang-ho, admitted that some of their customer assets had been invested on Haru Invest’s platform, although he did not disclose the exact amount.

To address the rapid increase in withdrawals from the Delio platform following Haru Invest’s announcement, Delio suspended withdrawals temporarily. Jeong acknowledged that some customer assets were managed by Haru Invest and expressed intentions to resolve the issue promptly. Some have accused Haru Invest of attempting a “rug pull” after finding its offices deserted, but the firm’s executives have denied these allegations, stating that the office closure was due to a decision to transition to remote work.

Crypto lender Delio struggles

In response to Delio’s situation, Upbit, the largest crypto exchange in South Korea, announced that it would block all withdrawals to Delio-based wallets. Upbit justified its decision as being in the interest of investor protection. South Korean financial regulators have been conducting on-site inspections of licensed VASPs this year.

South Korean law provides two types of VASP licenses: one for exchanges and wallet providers offering crypto-to-fiat trading services with banking partnership deals, and another for platforms that solely facilitate crypto-to-crypto trading, like Delio. Haru Invest claims to cater exclusively to overseas-based customers and does not possess a license.

Media reports indicate that regulators have not yet conducted on-site inspections of wallet operators like Delio. The Financial Intelligence Unit (FIU) spokesperson stated that they would investigate the matter and cooperate with investigating authorities if illegal activities, such as embezzlement or breach of trust, are discovered. The FIU also mentioned the need for further investigation regarding the alleged connection between Haru Invest and Delio.

The developments surrounding Delio and Haru Invest have raised concerns within the South Korean crypto community. Investors and industry participants will be closely monitoring the situation as regulatory actions and investigations unfold to gain a clearer understanding of the impact and potential consequences for the market

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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