Crypto Firm Declared Bankrupt with $1.75 Billion Debt Amid FTX Ties

Another crypto platform has filed for bankruptcy, citing unrecoverable losses tied to the collapse of FTX.

On November 22, a court in Seoul officially declared Delio, a South Korean virtual asset deposit platform, bankrupt, as reported by several local news outlets. The company, which owes its customers approximately 245 billion won ($1.75 billion), halted withdrawals last year, leaving many of its clients in limbo.

The bankruptcy has led to the start of liquidation proceedings, with a period for customer claims running until February 21, 2025. The first creditors’ meeting is scheduled for March 19, 2025. A court official revealed that a significant portion of the platform’s virtual assets, which were supposed to be managed separately, were instead stored in an FTX account. This mismanagement prevented Delio from recovering the funds after the November 2022 collapse of FTX, leaving around 2,800 customers without access to their assets since June 2023.

Delio’s legal troubles deepened earlier this year when it countersued South Korean regulators after the government’s Financial Intelligence Unit (FIU) recommended the dismissal of CEO Jeong Sang-ho.

In September 2023, Delio was fined 1.83 billion won ($1.34 million), and its business license was temporarily suspended. Jeong Sang-ho, who faces charges of fraud, embezzlement, and breach of trust, had argued in court that customer deposits were never guaranteed to be protected.