South Korea Sentences Delio CEO to 15 Years in $49M Crypto Fraud Case

As part of South Korea’s intensified scrutiny of crypto scams and fraud, the country has reportedly jailed Delio CEO Jeong Sang-ho. The South Korean court found him guilty in a $49 million crypto fraud case. He is charged with misusing customer funds and submitting false documents.

The Seoul Southern District Court has now sent him to jail with 15 years of prison sentence. The term is five years shorter than the 20 years sought by prosecutors. While he was found guilty of defrauding customers, the court acquitted him of the larger fraud charge involving roughly 250 billion won ($176 million).

Delio CEO gets 15-year prison sentence for crypto fraud case

According to the latest South Korean reports, the Seoul Southern District Court has ruled to sentence Delio CEO Jeong Sang-ho to 15 years in prison. This is because he was found guilty of a $49 million crypto fraud case that involved customer fund misuse and false document submission charges.

Reports claim that the Delio CEO defrauded customers of about 70 billion won. He has also allegedly submitted false documents to the regulators to register Delio as a virtual asset service provider. Although the prosecutors asked the court to sentence him for 20 years, the final decision from the judge was a shorter term of imprisonment. The statement read,

"The defendant committed the crime of defrauding a large sum from numerous victims, and given the methods and means employed, and the scale of the damage, the crime is extremely grave. [Jeong] has also failed to receive forgiveness from the victims who suffered serious economic losses."

It is also worth noting that the court didn’t convict the Delio CEO on the main fraud charges. These involved charges of misusing about a billion won ($175.6 million) of customer funds. The court stated that the evidence submitted was collected illegally, meaning it cannot be used to support the opponents’ arguments.

The court’s ruling significantly reduced the scope of the original fraud case. The Delio CEO was initially accused of defrauding 2,800 customers between August 2021 and June 2023. But the court dismissed these allegations, citing illegal evidence.

What led to Delio’s collapse?

As per the court ruling, Jeong obtained Delio’s license dishonestly. He had presented the company as a crypto bank, but according to the court, Delio didn’t have the ability to properly manage the business. The CEO has also reportedly neglected customer losses.

However, the court added that some external factors have also played a major role in the collapse of Delio. As Jeong has no previous records of criminal or illegal activities, the judge considered some factors in favor of him, resulting in a shorter-than-expected prison term.

While the verdict was initially set for July 16, it was delayed as the Delio CEO’s legal team challenged the evidence against him. The court reportedly reopened the case recently and ultimately ruled to dismiss broader charges.

For context, Delio operated as a bank, offering high interest rates on Bitcoin, Ethereum, and other crypto deposits. But suddenly in July 2023, the bank halted withdrawals, leaving customers unable to access their funds. Later, Delio suspended its services and filed for bankruptcy in November 2024.