South Korean BTC Lenders Plans To Drag Regulators To Court

The Financial Service Committee (FSC) has accused Delio, a South Korean Bitcoin lender, of fraud and embezzlement. Delio has declared its intention to sue the regulators. According to a local daily, Chosun Ilbo, the corporation has refuted these accusations and claims they are unfounded.

Delio has been controversial ever since the Financial Service Committee (FSC) accused the Bitcoin borrowing platform of fraud and theft. This led to a Financial Intelligence Unit (FIU) inquiry, which led to Delio receiving a three-month company ban and a fine of $1.34 million (1.83 billion won) as a punishment.

Delio has firmly opposed the regulatory actions, claiming they are unfair, untrue, and baseless. Delio’s legal team has started planning to file a case against the regulators to restore their reputation. Delio underlined in a statement that they had cooperated entirely with regulatory authorities throughout the inquiry process, offering all required paperwork and information to subside any worries.

However, the decision to suspend operations and issue a substantial fine has severely harmed the company’s operations and reputation. Investigation into the activities of the company reveals that Delio is in possession of substantial digital assets estimated at $1 billion in BTC, $200 million worth of ETH, and other altcoins which made up $8.1 billion.

Delio Accuses Regulators Of Plans To Shut Their Operations Deliberately

In a statement issued by Delio on this development, they accused the regulatory body of a deliberate ploy to disrupt their activities. The company said that “the said activities by the regulators are more than just a probe; they represent an effort to put undue pressure on Delio to shut down the platform.”

Delio maintains that they should be allowed to fix any problems and address any flaws before being abruptly shut down. Jeong Sang-ho, the Delio CEO, in an interview with Cointelegraph, said that the FIU sanctions have inducted some laws and are in fire need of arbitrary application, review, and legal interpretation.

Sang-ho also warned that such an attitude by the FIU and afflicted authorities could destroy the local virtual asset sector. However, South Korea has debated regulating the expanding blockchain and cryptocurrency sectors while upholding investor safety and financial stability.

Delio’s Proposed Actions May Be Consequential, Analysts, Investors Warn

Delio’s move to file a lawsuit against regulators may have broader ramifications for South Korea’s cryptocurrency and blockchain sector. An analyst with Cointelegraph, Prashant Jha, accused the South Korean laws of misconceptions. According to Jha, misinterpreting the existing laws guiding digital assets lending businesses remains the major issue.

He said the authorities must be clear whether the law includes initiating a lock-up procedure (which they have interpreted as “storage,” as stipulated in the South Korean Special Financial Services Act. One of the lawyers representing Delio (who spoke in anonymity) argued that South Korea as a country doesn’t have a provision in their law that guides the activities of virtual assets or allied businesses.

The lawyer insists that the country’s law wrongly interprets the virtual asset management products, which are currently being advertised as financial investment products. Evan Walker from The Bit Time observed that the global cryptocurrency community will be keenly watching Delio’s legal struggle with the authorities in the interim as it raises important issues regarding regulatory control, due process, and the future of blockchain-based firms in South Korea.