Delio is eager to prove that South Korean regulators have misapplied the laws against it.
Delio, the South Korean Bitcoin (BTC) lending company, is reportedly gearing up for a legal battle with the Financial Service Committee (FSC) and Financial Intelligence Unit (FIU).
The legal action comes after the company was slapped with an investigation and a substantial fine, which Delio claims are based on incorrect legal interpretations.
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According to the report shared by a local news portal, Delio is contesting allegations of fraud and embezzlement that were levied against it by the FSC. The company insists that the regulators have misapplied the law since there is a lack of definitive regulation around virtual asset operations.
It is worth noting that the FSC's recommendations were supported by the FIU, which suggested the removal of Delio's CEO, Jeong Sang-ho.
The FIU also imposed a business suspension on Delio for three months, accompanied by a fine of $1.34 million (or 1.83 billion won). The company warned that the seized assets could compromise its ability to continue operations.
Jeong Sang-ho, Delio's CEO, claimed that such regulations "leave a lot of room for unreasonable legal interpretation," adding that such enforcement actions could be detrimental to the domestic virtual asset industry.
The focal point of the dispute is the interpretation of existing laws. At issue is whether a company that uses virtual assets as collateral for cash loans should be categorized as a virtual asset business operator. Also under scrutiny is whether imposing a lock-up on such assets can be considered "storage" under the Special Financial Services Act.
Delio contends that the law is not clear on whether virtual asset deposits and management products should be categorized as financial products.
Delio is preparing for a legal fight against South Korean financial regulators, challenging what it perceives as a wrongful application of existing laws. The case is likely to attract considerable attention, given its potential to influence the regulatory landscape for virtual assets in South Korea.
