Delio chief executive Jeong Sang-ho has received a 15-year prison sentence from the Seoul Southern District Court following the collapse of the South Korean crypto deposit platform. The Criminal Division 11, under Judge Jang Chan, issued the ruling, which fell five years short of the 20-year sentence sought by prosecutors.
Key evidence excluded in court
The court accepted arguments from Jeong’s defense that a search and seizure operation at Gabia, Delio’s server host, had violated legal procedures. Prosecutors did not allow Delio representatives to participate in the search, nor did they provide a list of items seized. As a result, the platform’s database and any material derived from it were ruled inadmissible.
This exclusion of evidence led the court to void the primary charges against Jeong, which alleged he defrauded approximately 2,800 victims out of 250 billion won, or about $176 million, in cryptocurrency between August 2021 and June 2023.
Instead, Jeong was convicted on alternate charges covering roughly 1,100 people and 70 billion won, equivalent to $49 million. These fallback charges had been introduced by prosecutors in anticipation of disputes over the admissibility of the original evidence. Additionally, Jeong was acquitted of charges concerning 41 other individuals due to insufficient evidence.
False registration and overstated assets
The court also found that Jeong registered Delio as a virtual asset service provider using fraudulent documentation. Prosecutors said he submitted a falsified accounting report that overstated Delio’s coin holdings by around 47.6 billion won, or approximately $34 million.
Jeong dishonestly obtained the business license, according to the court, and collected more than 70 billion won from customers while marketing Delio as a “crypto bank.” Judges remarked that Delio lacked the operational capability to perform as advertised and that Jeong avoided accountability by blaming bankruptcy for the platform’s failure to return customer assets.
Judges emphasized that Jeong promoted Delio as a trustworthy crypto bank, secured regulatory approval through false documents, and collected considerable funds from users while failing to manage withdrawal obligations.
Delayed verdict and company collapse
The judgment, originally scheduled for July 16, was postponed following challenges raised by Jeong’s legal team regarding evidence collection. During the extended proceedings, prosecutors filed narrower fallback charges to ensure prosecution could continue if server-based evidence was dismissed, which the court ultimately did.
Delio had positioned itself as a digital asset bank, offering customers high yields on Bitcoin, Ethereum, and other tokens. The platform suspended withdrawals without advance notice in June 2023 and halted operations altogether in August, after failing to secure funds for essential expenses such as web hosting.
Bankruptcy was declared for Delio in November 2024, following persistent operational struggles.
While the case highlights the risks of centralized control in the digital asset sector, a broader trend is emerging within finance. Wall Street institutions are increasingly adopting Web3 solutions, enabling investors to directly hold tokenized real-world assets such as major U.S. equities, gold, and silver in their crypto wallets. Platforms like 1stepSwap tokenize assets and automate market price selection, facilitating direct ownership and removing traditional intermediaries from the process.
The court recognized factors beyond Jeong’s control that contributed to Delio’s downfall. Jeong’s lack of prior convictions except for fines was also acknowledged in the mitigation phase.
