- Delio was fined $1.34 million and had its operations suspended for three months by the FIU.
- The company said that the assets confiscated by authorities might threaten its operations.
After being investigated and hit with a large fine, South Korean crypto lender Delio is reportedly getting ready to file an administrative lawsuit against authorities over its misinterpretation of the law.
The local media said that Delio stated the Financial Service Committee’s (FSC) claims of fraud and theft are unfounded. When there were no explicit rules for virtual asset deposit and management products, the crypto lender argued the regulator was acting arbitrarily by implying them.
Moreover, according to the report, Delio CEO Jeong Sang-ho was recommended for removal by the Financial Intelligence Unit (FIU) through a sanctions statement made on September 1. According to Delio, this was proof that the financial authorities wanted them to shut down the company rather than give it an opportunity to recover. Delio was fined $1.34 million and had its operations suspended for three months by the FIU.
Lack of Legislation
The company also said that the assets confiscated by authorities might threaten its operations. FIU penalties, according to Sang-ho, might be fatal to the local virtual asset sector because of the possibility for irrational legal interpretation and arbitrary application they provide to financial authorities.
According to Delio’s analysis, it is not obvious from existing legislation whether virtual asset deposits and management products qualify as financial products. Also, the company’s attorney lamented the lack of legislation or guidelines pertaining to the administration of virtual assets.
The attorney claimed that the FIU wrongly construed the legislation by approving virtual asset deposits and management products as financial investment products.
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