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South Korean Bitcoin lender Delio to sue financial regulators

South Korean Bitcoin lender Delio to sue financial regulators

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TL;DR

  • South Korean Bitcoin lender Delio is preparing to file an administrative lawsuit against the Financial Service Committee (FSC) over allegations of fraud and embezzlement, which Delio claims are based on a flawed interpretation of existing laws.
  • The lawsuit highlights the regulatory ambiguity surrounding virtual asset deposit and management products in South Korea and the broader challenges faced by the crypto industry.

South Korean Bitcoin lender Delio is gearing up to file an administrative lawsuit against the country’s Financial Service Committee (FSC).  The firm contends that the FSC’s allegations of fraud and embezzlement are unfounded and stem from a flawed interpretation of existing laws. Delio argues that the regulatory body has acted unreasonably.

The Financial Intelligence Unit (FIU), a subsidiary of the FSC, had earlier recommended the removal of Delio’s CEO, Jeong Sang-ho, and imposed a three-month business suspension along with a fine of 1.83 billion Korean won (approximately $1.34 million). 

According to local reports, Delio claims that these actions are indicative of the financial authorities’ intent to shut down the firm rather than allow it to rectify its operations.

The stakes for Delio and the crypto industry

The lawsuit comes at a critical juncture for Delio, as the FIU’s sanctions and asset seizures could jeopardize the company’s ongoing operations. CEO Jeong Sang-ho expressed concerns that such actions by financial authorities could potentially “kill the domestic virtual asset industry.” 

The primary point of contention lies in the interpretation of existing laws, particularly whether lending companies that use digital currencies as collateral fall under the category of virtual asset business operators.

The case also highlights the broader issue of regulatory ambiguity in the crypto space. Delio’s legal team points out that there are no specific provisions in the current law that define virtual asset deposits and management products as financial products. They argue that the FIU has arbitrarily classified these as financial investment products, which they believe is a misinterpretation of the law.

Delio’s impending lawsuit against the FSC and FIU could become a landmark case in the crypto industry, especially in South Korea. 

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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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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