'Delio CEO Accused of Embezzling 250 Billion Won in Cryptocurrency Denies All Charges at First Trial'

Triggered by a "Force Majeure Event"

The CEO of Delio, a cryptocurrency deposit service operator accused of defrauding investors of coins worth approximately 250 billion KRW and subsequently halting deposits and withdrawals, denied all charges at the first trial.

Last March, Jeong Mo, CEO of the coin deposit company Delio, appeared for a warrant hearing. [Photo by Yonhap News]

On the 11th, the Criminal Division 11 of the Seoul Southern District Court (Presiding Judge Jeong Doseong) held the first trial for Jeong Mo (51), the CEO of Delio, who is charged with fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, among other charges.

Jeong’s defense attorney attending the trial stated, "We fundamentally deny all the charges in this case," adding, "The suspension of virtual asset deposits and withdrawals by Delio was triggered by a force majeure event that even made overseas exchanges difficult, but the prosecution claims that the situation arose due to the defendant’s breach of trust or embezzlement."

Jeong is accused of defrauding over 2,800 victims of coins worth a total of approximately 250 billion KRW from August 2021 to June last year. He allegedly submitted a falsified audit report from an accounting firm, claiming to hold 47.6 billion KRW worth of coins more than he actually did, and used fraudulent methods to register as a virtual asset business operator, promoting Delio as a legitimate company to attract customers.

It was also revealed that despite continuous losses of customers’ deposited coins due to deficits, operational losses, and hacking damages from the early stages of the business, these were concealed. In November 2022, although about 80% of the company’s assets were unsecured loans to coin deposit companies, Delio falsely advertised that it was continuously generating profits through arbitrage and coin-collateralized loans.

In March 2020, it was found that Delio submitted false records of coin-collateralized loans worth 2 billion KRW and defrauded approximately 1 billion KRW in investment funds from an investment association.

Delio, a domestic coin deposit company, provided CeFi (centralized finance) services offering high interest rates for deposits of virtual assets such as Bitcoin and Ethereum for a certain period but abruptly suspended withdrawals on June 14 last year. In August of the same year, the service was halted, citing failure to obtain court approval for necessary expenses such as web hosting.

Delio filed for rehabilitation proceedings with the court, but the petition was dismissed in April. In the same month, the Seoul Southern District Prosecutors’ Office’s Joint Investigation Team on Virtual Asset Crimes (led by Park Geonwook) sent Jeong to trial without detention.