The South Korean District Court in Seoul has ruled on the collapse of the encrypted lending platform Delio. According to local media reports, Delio was sentenced to 15 years ' imprisonment by former CEO Zheng Sang-ho, less than the 20 years previously requested by the prosecution.
Main charges are downsized.
The key dispute in the case was evidence-gathering proceedings. The court found that the prosecution had previously failed to guarantee Delio ' s right to participate in the proceedings during the search and seizure of the server trustee, Gabia, and had not delivered the seizure list, and therefore the relevant databases and derivatives had no evidentiary effect.
This finding weakened the initial basis of the prosecution ' s prosecution. The original allegation was that Zheng Sang-ho was suspected of fraud against about 2,800 users between August 2021 and June 2023, in an amount of approximately 250 billion won.
Down to 70 billion won.
The Court eventually adopted a smaller set of subsequent prosecution-supplemented indictments, covering approximately 1100 victims, involving approximately 70 billion won, or approximately $490.0 million. The other 41 victims concerned were not found in court for failure to submit evidence.
- Original allegations: approximately 2,800 victims
- Original amount: approximately 250 billion won
- Final conviction: about 70 billion won
Application for registration of false material
In addition to the fraud-related charges, the court found that Zheng Sang-ho had used false accounting firm reports when applying for registration of a virtual asset service provider for Delio. According to the prosecution, this material exaggerates the size of the encrypted assets held by the platform, amounting to approximately 47.6 billion won.
In sentencing, the court mentioned that the collapse of the platform was not influenced by a single factor, but that external events also had an impact on the deterioration of the business. At the same time, Zheng Sang-ho had no prior record of having exceeded the fine level.
The platform was suspended and bankrupt.
Delio had operated in the name of the “Digital Assets Bank” and offered high interest rate returns to deposits in bitcoin, in foreign currencies such as the Taifeng. In June 2023, the Platform suspended cash withdrawals without prior notice; in August of the same year, services were further suspended owing to the lack of court approval to pay operating costs, including website hosting.
By November 2024, Delio was officially declared bankrupt. The case also shows that judicial accountability in the aftermath of a platform mine may still be directly affected by the legality of the evidence-gathering process.