The Seoul Southern District Court has sentenced Delio CEO Jeong Sang-ho to 15 years in prison over the failure of the South Korean crypto deposit platform, five years less than prosecutors had sought.
According to local outlet Newsis, Criminal Division 11 of the court, presided over by Judge Jang Chan, delivered the ruling on Thursday afternoon. The court accepted only part of the prosecution’s original case, and Jeong’s conviction rested largely on fallback charges that were added later.
Server evidence was thrown out
The case turned on procedure. Jeong’s lawyers argued that a search and seizure carried out at Gabia, the company hosting Delio’s servers, had been unlawful, and the court agreed.
The court found that prosecutors did not guarantee Delio’s right to participate in the search and did not hand over a list of seized items. As a result, the platform’s database, along with everything derived from it, was ruled to have no evidentiary value.
That sharply narrowed the indictment. Prosecutors had originally accused Jeong of defrauding about 2,800 people of roughly 250 billion won, or about $176 million, in crypto between August 2021 and June 2023.
What remained was a reserve case prosecutors had filed after the evidence came under challenge. That narrower case covered about 1,100 victims and roughly 70 billion won, or $49 million. Jeong was also acquitted with respect to 41 additional victims for whom no evidence was submitted.
False filing tied to VASP registration
Jeong was also convicted of registering Delio as a virtual asset service provider using a falsified accounting firm report. Prosecutors said the document overstated the company’s coin holdings by about 47.6 billion won, roughly $34 million.
What the court said
The court said Jeong obtained his license dishonestly and took more than 70 billion won from customers. Judges also said he marketed Delio as a crypto bank without having the capacity to operate it, then evaded responsibility by citing bankruptcy when customer assets were not returned.
In mitigation, the court noted that outside events had contributed to the collapse and that Jeong had no prior convictions carrying a punishment above a fine.
Verdict was delayed after evidence challenge
The ruling had originally been set for July 16, but it was delayed after Jeong’s legal team raised objections over the evidence and the court reopened arguments. Prosecutors then submitted the narrower fallback charges in case the server materials were excluded, which is what ultimately happened.
Delio had frozen withdrawals in 2023
Delio had offered high interest on deposits of Bitcoin, Ethereum, and other tokens while presenting itself as a digital asset bank. The platform halted withdrawals without warning in June 2023, citing market volatility. It suspended service in August that year after failing to secure court approval for operating costs, including web hosting, and it was declared bankrupt in November 2024.