Jung Sang-ho, the CEO of Delio, a South Korean crypto yield platform that collapsed last year, faced scrutiny during a recent court hearing regarding the platform's collapse and investor losses. Delio, which owes creditors an estimated 250 billion won ($181 million), has been embroiled in legal proceedings focusing on allegations of fraud, embezzlement, and breach of trust.

At the hearing held on June 25 at the Seoul Southern District Court, Jung addressed investors' concerns, stating unequivocally that deposits made by users were not guaranteed against losses. He pointed out that the terms and conditions of Delio explicitly stated the lack of principal protection, a requirement also mandated by the Korea Financial Intelligence Unit (FIU).

In response to accusations from creditors and prosecutors about the platform's duty of care to safeguard principal, Jung's legal team contended that such claims were factually incorrect. They argued that Delio's operational assets were inadequately collateralized, constituting only a small fraction of its total assets following the collapse.

Delio had initially gained prominence as the first South Korean company in the crypto lending and depositing field to receive Virtual Asset Service Provider (VASP) approval from the FIU in 2022. The platform emphasized its commitment to security and reliability, highlighting its Information Security Management Systems (ISMS) certification and high-level information security measures akin to those of traditional financial institutions.

The troubles for Delio intensified in June 2023 when its sister company, Haru Invest, suspended withdrawals and deposits, citing issues with a "consignment operator." This move prompted Delio to follow suit the next day due to significant exposure to Haru Invest. Allegations against Haru Invest executives included misappropriation of customer crypto deposits over several years, falsely presenting operations as stable and low-risk.

Despite ongoing legal battles and investor discontent, Delio under Jung Sang-ho's leadership indicated plans to gradually resume services, starting with limited withdrawals for staking services in June 2023. The CEO's next court appearance is scheduled for July 23, as authorities continue to investigate the circumstances surrounding Delio's collapse and the impact on investors.