Delio, a South Korean cryptocurrency asset management firm that holds dual licenses as a Virtual Asset Service Provider (VASP) in Korea and as a Money Services Business (MSB) in the U.S., has faced a three-month business suspension along with a fine of KRW 1.896 billion (equivalent to approximately $1.6 million USD). These penalties were imposed by the Financial Intelligence Unit (FIU) of the Financial Services Commission, which announced these punitive measures on September 1. The FIU cited multiple violations of financial transaction laws as the basis for these actions.

Regulatory Oversight

The FIU outlined that Delio had failed to adhere to various obligations under the Act on Reporting and Using Specified Financial Transaction Information. Specifically, the firm neglected to report transactions involving unregistered virtual asset service providers (VASPs), did not conduct assessments of money laundering risks before launching new products and services, and did not fulfill customer verification requirements. The FIU highlighted that “Delio facilitated the transfer of customer assets to unregistered foreign virtual asset service providers on 171 occasions and also facilitated the storage activities of these unregistered VASPs.”

Operational Ramifications

Despite its regulatory licenses, Delio recently suspended customer withdrawals, which raised concerns about the company’s operational integrity. Delio had been offering virtual asset deposit services with annual interest rates of up to 10.7%. However, the firm abruptly halted customer withdrawals in June, prompting an investigation by the FIU and subsequent legal actions.