Delio to Suspend Service from the 11th
Haroo Invest "Capital Recovery Will Take Time"
Rehabilitation Hearing Scheduled This Month... Attention on Loss Scale
Since the launch of the joint investigation team on virtual asset crimes (Joint Investigation Team), composed of personnel from seven investigative and financial authorities including the prosecution and the Financial Supervisory Service, the investigation into Delio and Haru Invest, virtual currency deposit companies and the 'first case' of the team, is gaining momentum. These companies have not disclosed the exact scale of losses even after nearly two months since the suspension of deposit and withdrawal services triggered the crisis, leading to growing dissatisfaction among users.
The lounge on the first floor of Delio located in Daechi-dong, Gangnam-gu, Seoul, visited on the 10th, was dark and empty. Photo by Gong Byung-sun mydillon@
Delio announced on its website on the 8th that web and mobile services would be suspended from the 11th. Delio stated, "Due to unpaid web hosting fees, the web hosting company informed us that if the service fee is not paid by the deadline, the service will be suspended from the 11th," adding, "We are requesting the web hosting company and other related parties to prevent the suspension of customer services and company operations such as Delio's web, non-fungible token (NFT) exchange, and mobile web and application (app) services, but since service suspension is expected, we are notifying customers in advance." As of 7:30 a.m. on the 14th, Delio's website was inaccessible.
It has been confirmed that Delio has also put up its office located in Daechi-dong, Gangnam-gu, Seoul, for sale. The property offered by Delio is an office on the 13th floor. Jeong Suho, the lead attorney at Renaissance Law Firm representing Delio, said, "Putting the office up for sale is a measure to reduce unnecessary costs such as the considerable rent."
Haru Invest announced on its website on the 6th that it would recover funds from B&S Holdings (B&S), a high-yield, high-risk specialized virtual currency trading company where it had entrusted money, through civil and criminal means. Haru Invest stated, "We are doing everything possible, including civil and criminal legal measures, to recover assets from B&S," but added, "It will take time to recover the assets."
Delio and Haru Invest, as virtual currency deposit companies, offered customers high-interest virtual currencies of around 10% per annum. However, in June, both companies suspended deposit and withdrawal services for business reasons. Haru Invest suspended deposits and withdrawals citing problems with B&S, where it had entrusted funds, while Delio claimed it had no choice but to block deposits and withdrawals due to Haru Invest's issues.
Virtual Currency Deposit Companies Suspend Deposit and Withdrawal... Absence from Rehabilitation Hearings or Non-disclosure of Loss Scale
Since the launch of the Joint Investigation Team on the 26th of last month, the related investigation appears to be accelerating. Upon its launch, the team took over the case and on the 4th conducted a search and seizure of the office of Traum Infotech, where Delio is known to have entrusted funds. Traum is an unregistered virtual asset business operator, and users claim they were not separately notified about Delio's investment in Traum. A Joint Investigation Team official said, "We are currently summoning and investigating related persons necessary for the investigation." Prior to this, the prosecution reportedly secured related materials by conducting search and seizures at Haru Invest and B&S offices on the 14th of last month and Delio's office on the 18th.
As Delio and Haru Invest have not disclosed the scale of damages, user dissatisfaction is growing. In June, users applied for corporate rehabilitation procedures against Delio and Haru Invest through the law firm LKB Partners. When rehabilitation procedures proceed, the company must disclose the scale of damages to the court. At the rehabilitation hearing for Delio held at the Seoul Bankruptcy Court on the 20th of last month, Delio did not provide specific answers to the judge's questions regarding the scale of damages. Regarding this, Attorney Jeong said, "There is no intention to hide the scale of losses," adding, "It was too early to estimate the possibility of recovering claims or the amount of claims to be recovered." Haru Invest, which missed all hearings scheduled on the 5th and 18th of last month, plans to attend on the 17th and present its opinions on the rehabilitation procedure.
Delio is also scheduled to hold a second rehabilitation hearing on the 31st. Attorney Jeong stated, "Due to investigations by the Financial Intelligence Unit (FIU), prosecution, and the court's preservation order decision, the situation is challenging," adding, "We will prepare as sincerely as possible within the feasible scope and disclose necessary information." On the other hand, Lee Jeongyeop, lead attorney at LKB Partners, said, "Delio's effective suspension of operations will have a significant impact on the court's rehabilitation decision," and "It is believed that Delio suspended operations with rehabilitation in mind."
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