- South Korean crypto lender Delio received a fine of $1.4 million for breaking regulations.
- They also received a suspension for three months.
Not every crypto firm tries to follow the guidelines of a country. Apparently, some of them try to outsmart the country’s regulators by engaging in illegal trades. A crypto lender, Delio, received a series of punishments in South Korea for engaging in illegal acts.
Crypto Lender Delio to Suspend Operations
- A crypto lending company in South Korea had some losses after the regulatory body in the country hit it with some new punishment. Apparently, the crypto lender Delio received a directive from the financial regulatory authority to cease its operations for a duration of three months. This is due to the issue of not following regulatory rules according to the body. Furthermore, the crypto lender has to pay a fine of up to KRW 1.896 billion ($1.4 million) as part of the punishment.
- The Financial Intelligence Unit (KoFIU) is a financial regulatory unit in South Korea. Apparently, they operate under the South Korean Financial Services Commission. They are having a meltdown with the crypto lender for breaking some of its rules. So, the cease of operations and the fine aren’t the only punishments from this body. They are also asking the crypto lender to remove one of its executives.
- In South Korea, Delio is under the classification of virtual asset service provider (VASP). So, they are under these regulators issuing these sentences. While they were still in operation, Delio offered deposit services with an annual yield of 10.7%. However, they immediately stopped offering these services in the middle of the year in June. The reason behind this was the regulatory authority cracking down on them.
What was the Offense of the Crypto Lender
- The regulatory authorities in South Korea made it clear that the crypto lender Delio broke some of their rules. Hence, the punishment they are currently getting from them. Delio involved itself in trading activities with unregistered VASPs. In other words, they are aiding unregistered virtual asset service providers (VASPs) to make illegal trades, as alleged. So, in the process of making these trades, Delio breached restrictions on the trading of affiliate-issued virtual assets.
- Not only was this crypto lender helping these unregistered VASPs make these trades, but they were also involved in other illegal activities. One of them was assisting these VASPs to store illegal assets to avoid detection by the regulators. Furthermore, South Korean regulators, in their investigations, found out Delio failed to fulfill Know Your Customer (KYC) obligations.
Conclusion
A South Korean Lending Platform, Delio, found itself in a dilemma when regulators caught up with their illegal activities. Apparently, they were doing things that were against the country’s law. One of them was helping illegal trading institutions in the country to carry out trades. So, they received punishment for engaging in these acts. Some of the penalties were fines of up to $1.4 million, suspension, and the removal of their executive.
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