South Korean prosecutors have formally requested a 20-year prison sentence for Jung Sang-ho, the CEO of the collapsed cryptocurrency deposit platform Delio, on charges of embezzling approximately 250 billion won ($181.5 million) in customer funds. The request, reported by Yonhap News, represents one of the most severe penalties sought in a crypto-related case in the country and marks a significant moment in South Korea's ongoing crackdown on digital asset fraud.
Delio, which marketed itself as a high-yield crypto deposit service offering returns of up to 10.7% on Bitcoin, Ether, and other tokens, abruptly halted all withdrawals in June 2023. The freeze stranded thousands of investors and triggered panic across the market. Investigations later revealed that the company had placed a large portion of customer assets with FTX, whose collapse in late 2022 made those funds largely unrecoverable. Prosecutors allege that Delio continued to promote its services and failed to disclose the growing risks to customers, even as the company's financial situation deteriorated.
Court documents detail a systematic scheme of deception. Prosecutors claim that Jung Sang-ho submitted a falsified audit report that overstated the company's crypto holdings by tens of billions of won, allowing Delio to secure regulatory registration and build trust with investors. They argue that the CEO's actions were not a mere mistake but a calculated effort to maintain operations while knowing the company was insolvent. The collapse affected more than 2,800 investors, many of whom lost their life savings. Victims have attended every court hearing, demanding severe punishment, and prosecutors have emphasized that Jung has shown no remorse, instead evading responsibility and maintaining an uncooperative attitude.
Delio's legal team denies all charges, arguing that the platform's failure was caused by external shocks in the global crypto market, not intentional fraud. However, prosecutors counter that the CEO's false advertising and failure to disclose risks constitute criminal deception. The case is unfolding under South Korea's new Virtual Asset User Protection Act, which took effect in 2024 and enforces stricter rules on custody, disclosures, and investor protection. The Delio trial is seen as a test case for this legal framework.
The case has sent shockwaves through South Korea's crypto ecosystem, eroding trust in deposit services that were once popular for their high yields. Industry experts note that unlike traditional banks, such services are not covered by deposit insurance, leaving users fully exposed to platform insolvency or fraud. The outcome of the trial is expected to influence regulatory policy and potentially set a global precedent for how courts handle large-scale crypto fraud.
The prosecution's request for a 20-year sentence is among the highest for a crypto-related case in South Korea. In comparison, the CEO of Bitsonic received a seven-year sentence for fraud, and the massive Terra/Luna collapse remains under investigation. A Seoul court will now decide whether to impose the full sentence, with a verdict anticipated within the next few months.
