Delio CEO Found Guilty in First-of-Its-Kind Virtual Asset Business Operator Case Under Special Financial Information Act

Seoul Southern District Court has found Delio CEO Jeong Sang-ho guilty of submitting false documentation during the virtual asset business operator registration process, violating the Specific Financial Information Act. This marks the first time a virtual asset business operator's representative has been convicted under this law.

The court sentenced Jeong to 15 years in prison on August 13, 2026, for violations including fraud under the Special Economic Crimes Punishment Act and specific financial information act offenses. The court determined that Jeong submitted a falsified due diligence report showing inflated asset holdings, which allowed Delio to operate for 14 months after registration was approved in February 2022.

The due diligence report, prepared by an accounting firm on December 9, 2021, claimed Delio held 605.939 BTC and 2,511.591 ETH—figures based solely on internal ledger data rather than actual holdings. Despite claims that the assets existed but were transferred to exchanges for management, the court found no evidence of proper storage or operational records.

During testimony, an employee reported missing digital assets to Jeong, who responded by saying he would 'fill it in' and told them not to worry. The court concluded Jeong must have known about the shortfall since he reviewed the due diligence report and was aware of asset management status.

The court emphasized that holding amounts directly impact customer protection and were a critical factor in FIU's registration approval process, leading to the conviction for submitting falsified documents through misleading reports.