South Korean prosecutors have requested a 20-year prison sentence for the CEO of crypto deposit service Delio, Jeong Sang-ho, accusing him of orchestrating a $169 million fraud that left nearly 2,800 investors unable to access their funds. The request was made during closing arguments at the Seoul Southern District Court on Thursday, under the Act on Aggravated Punishment of Specific Economic Crimes.
Prosecutors allege deliberate deception
According to the Korean news agency Yonhap, prosecutors described Jeong’s actions as involving “active deceptive acts and false promotion,” which resulted in massive financial harm. They further stated that Jeong has “exacerbated their suffering by evading responsibility and maintaining an uncooperative attitude.” Delio, which operated a crypto deposit service promising high-interest returns on fixed-term deposits, abruptly suspended withdrawals on June 14, 2023, freezing customer assets worth 250 billion Korean won ($169 million). The company was declared bankrupt by a Seoul court in November 2024.
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Jeong’s defense acknowledges harm
Jeong’s legal team acknowledged the suffering of victims, stating, “We are aware of the victim’s suffering and feel a deep sense of responsibility.” The defense added that Jeong would seek to compensate victims if acquitted. Jeong was indicted in April 2025 on charges of embezzling $169 million in crypto assets from victims between August 2021 and June 2023. The first-instance verdict is scheduled for July 16.
Broader regulatory crackdown on South Korean crypto exchanges
The Delio case is unfolding amid a wider regulatory crackdown on South Korea’s crypto industry. Earlier this month, Coinone, the country’s third-largest exchange, was fined and ordered to partially suspend business operations over Anti-Money Laundering (AML) failures. This followed a $24 million fine and six-month partial suspension handed to Bithumb in March for similar AML violations. The pressure on exchanges intensified after Bithumb mistakenly sent customers 620,000 Bitcoin, worth approximately $42 billion at the time, instead of 620,000 Korean won.
Why this matters to investors and the crypto industry
The Delio case highlights the risks associated with crypto deposit services that promise high returns, often without adequate regulatory oversight. For investors, it underscores the importance of due diligence and the potential consequences of platform insolvency. For the broader industry, South Korea’s aggressive enforcement signals a shift toward stricter accountability and compliance requirements, which could reshape how crypto services operate in one of the world’s most active digital asset markets.
Conclusion
The sentencing request for Jeong Sang-ho represents a significant moment in South Korea’s efforts to regulate the crypto sector and protect investors. With the verdict expected in July, the case will likely set a precedent for how similar fraud cases are prosecuted in the country. Meanwhile, ongoing regulatory actions against major exchanges indicate that South Korea is moving toward a more stringent oversight framework for digital assets.
FAQs
Q1: What is Delio and why did it collapse?
Delio was a South Korean crypto deposit service that offered high-interest returns on fixed-term deposits. It collapsed in June 2023 after abruptly suspending withdrawals, freezing $169 million in customer assets. The company was declared bankrupt in November 2024.
Q2: What charges does Jeong Sang-ho face?
Jeong Sang-ho was indicted in April 2025 on charges of embezzling $169 million in crypto assets from victims between August 2021 and June 2023. Prosecutors are seeking a 20-year sentence under the Act on Aggravated Punishment of Specific Economic Crimes.
Q3: How does this case affect the broader crypto industry in South Korea?
The case is part of a wider regulatory crackdown on crypto exchanges and services in South Korea. Recent fines and suspensions of major exchanges like Coinone and Bithumb signal stricter enforcement of AML and investor protection rules, which could lead to more stringent compliance requirements for all crypto-related businesses in the country.
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