Crypto platform operator gets 15-year prison sentence in South Korea due to $50 million scam

The CEO of Delio, identified only as Mr. Jeong, received a 15-year prison sentence in South Korea after being found guilty in a $50 million fraud case that affected more than 1,100 people, local news outlet Newsis reported Thursday.

Delio, which went bankrupt in November 2024, accepted bitcoin BTC$63,699.86 and ether ETH$1,890.84 deposits, promised high yields and then locked customers out of their funds overnight on June 14, 2023. It

"While operating Delio, the defendant falsely obtained a virtual asset trading license and defrauded victims of approximately 70 billion won in virtual assets," the Seoul Southern District Court said when handing down the sentence against Mr. Jeong.

Prosecutors initially sought a 20-year prison sentence for Mr. Jeong, but the court threw out a lot of the evidence due to procedural deficiencies, which were brought forward by Mr. Jeong’s lawyers. He was initially accused of defrauding 2,800 victims. The defense lawyers are expected to appeal the sentence.

The ruling against Delio is just one more in a series of crypto-related fraud cases in South Korea. Do Kwon, the South Korean co-founder of Terraform Labs behind the TerraUSD (UST) algorithmic stablecoin and Luna token, orchestrated one of the largest frauds in financial history when the ecosystem collapsed in May 2022, wiping out roughly $40 billion in investor funds. In 2022, seven executives of the crypto exchange V Global were sentenced to prison for a $1.7 billion fraud, with former CEO Lee Byung-gul receiving 22 years.