Business13 August, 20263 min read
South Korea Sentences Delio CEO Jeon Sang-ho to 15 Years for $49 Million Crypto Fraud
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Delio CEO Jeong Sang-ho sentenced to 15 years for crypto fraud in South Korea. Convicted on fallback charges after acquittal of the main $175.6 million fraud charge.
15 Years for Delio CEO
A South Korean court sentenced Delio crypto lender CEO Jeon Sang-ho to 15 years in prison for a $49 million fraud case, after the platform attracted clients’ cryptocurrency with high interest rates but halted withdrawals in June 2023. The sentencing was also described as a 15-year term for Jung Sang-ho, 54, with the Seoul Southern District Court’s Criminal Division 11, presided over by Judge Jang Chan, handing down the sentence Thursday. Prosecutors had sought a 20-year sentence for Jeon, while the court ordered Jung detained in the courtroom Thursday, citing a risk of flight.
The court found Delio had continued to attract customers by advertising high interest rates without properly disclosing that its holdings had fallen far short of deposited assets due to accumulated operating losses and hacking damage. In June 2023, Delio abruptly halted all withdrawals on June 14, 2023, and later declared bankrupt in November 2024.
Evidence Fight and Victim Counts
The case hinged on procedural disputes over evidence, with the court excluding key electronic evidence gathered in a search and seizure at Gabia, the server hosting company used by Delio, and acquitting Jung on the original charges based on that evidence. In the same account, prosecutors added alternative charges specifying individual victims and the scale of damages, and the court ultimately convicted Jung of defrauding investors of approximately 70 billion won in virtual assets. Another report said the Seoul Southern District Court sentenced Jeong Sang-ho to 15 years after ruling that evidence seized from Delio's server host was unlawfully obtained, voiding the primary charge covering 2,800 victims and 250 billion won.
That report said what survived was the reserve case, covering about 1,100 victims and roughly 70 billion won, or $49 million, and that Jeong was acquitted in respect of 41 further victims for whom no evidence was submitted. Prosecutors had indicted Jung in April 2024 alleging he defrauded more than 2,800 investors of 245 billion won in virtual assets between August 2021 and June 2023, while the court cited the collapse of FTX as an external factor in its sentencing rationale.
Delio’s Collapse and Fallout
Delio’s withdrawal freeze and collapse formed the backdrop for the fraud case, with the platform offering fixed returns in exchange for depositing crypto assets and then freezing withdrawals in June 2023. One account said Delio’s withdrawals were frozen in June 2023 citing difficulties at its partner Haru Invest, which became one of the victims of the FTX exchange collapse, while another said Delio suspended customer withdrawals in June 2023 and was declared bankrupt in November 2024. The court described the offense as serious because of the number of customers involved, the financial losses, and the methods used, and it said, "countless victims have suffered serious financial harm and recovery does not appear easy."
In mitigation, the court noted that outside events had contributed to the collapse and that Jeong had no previous convictions carrying a penalty above a fine, while the court also said, "The defendant committed the crime of defrauding a large sum from numerous victims". The sentencing also came after South Korean authorities took an interest in Delio’s operations in September, when the Financial Intelligence Unit suspended the company’s activities for three months and fined it 1.896 billion won.