South Korean prosecutors have asked a court to sentence former Delio CEO Jeong Sang-ho to 20 years in prison, alleging he led a large-scale crypto fraud that caused roughly 250 billion won, or about $169 million to $181.5 million, in investor losses. The request, made during closing arguments at the Seoul Southern District Court, places one of South Korea’s most closely watched crypto deposit cases at the center of the country’s enforcement push.
Authorities said nearly 2,800 clients were affected after withdrawals were halted, leaving investors exposed to major losses. Prosecutors framed the case as systematic deception that weakened investor protections in a crypto market still adapting to formal regulatory oversight.
Prosecutors Allege Liquidity Misrepresentation and False Audit Claims
According to prosecutors, Jeong misrepresented Delio’s liquidity position and the safety of its deposit-and-interest products. They also alleged he continued operating the platform despite insolvency and submitted a falsified audit that inflated crypto holdings by tens of billions of won.
The alleged misconduct took place between August 2021 and June 2023. Prosecutors described Jeong’s actions as “active deceptive acts” intended to secure regulatory confidence and attract investor funds, while accusing him of misappropriating customer assets during that period.
They also told the court that Jeong was uncooperative during the investigation and had evaded responsibility, aggravating harm to victims. Those allegations make the case as much about governance and custody disclosure as about investor losses.
Verdict Could Shape Korea’s Crypto Enforcement Standard
The Delio prosecution is being viewed as part of a broader enforcement push under South Korea’s Virtual Asset User Protection Act, enacted in 2023. The case may become a key test of how authorities police deposit-style crypto products, especially where platforms make claims about liquidity, custody and audited holdings.
Market participants should expect closer scrutiny of custody statements, reserve claims and audit practices. Providers offering exchange, lending or tokenized-asset services may face higher compliance costs as they align with the stricter posture prosecutors signaled in court.
The first-instance verdict is scheduled for July 16, 2026. Its outcome will help define how South Korea treats executive accountability in crypto deposit failures, and how firms present liquidity and audit claims to both institutional counterparties and retail customers.
