TechFlow reports that South Korean cryptocurrency asset management company Delio has been criminally reported and penalized with a three-month business suspension and a fine of 1.896 billion KRW by authorities due to its sudden halt of withdrawals in June.
The Financial Intelligence Unit (FIU) publicly disclosed, for the first time through a sanction announcement, the specific names and details of sanctioned companies. In addition to Delio, GoldCrown was also sanctioned.
On September 1, the FIU stated: "Sanctions imposed on Delio include a three-month full business suspension, an 1.896 billion KRW fine, and a recommendation for dismissal of one executive."
The FIU cited violations including operating as an unregistered virtual asset service provider (VASP), breaching transaction prohibition obligations, violating restrictions on trading virtual assets issued by related parties, failing to assess money laundering risks before launching new products or services, failing to comply with customer identification requirements, and failing to establish an independent audit system.
Regarding the unregistered VASP and breach of transaction prohibitions, the FIU stated: "Delio provided support for 171 virtual asset transfers for four foreign VASPs that were not registered." Additionally, "Delio restricted virtual asset wallet transfers 80 times at the request of another unregistered VASP A, and supported A's virtual asset custody activities."
Concerning violations involving specific related parties, the FIU said: "Delio violated Article 8 of the Act on Reporting and Use of Certain Financial Transaction Information and other relevant laws by assisting related party B in issuing virtual assets and acting as a transaction intermediary."
Delio also failed to assess money laundering risks prior to offering 41 new products and did not comply with customer identification obligations or establish an independent audit system.
Prior to this, on August 17, the FIU announced partial revisions to its "Regulations on Inspection and Sanction of Reports on Specific Financial Transactions" and began implementing them.
