South Korean Bitcoin lending company Delio is reportedly preparing to file an administrative lawsuit against regulators over a misinterpretation of the law that resulted in the crypto lending company being investigated and levied with huge fines.
Bitcoin lender Delio says allegations of fraud and corruption made by the Financial Services Commission (FSC) are baseless. Report Published in local daily newspaper. The cryptocurrency lender claimed that in the absence of clear provisions on virtual asset deposits and management products, the regulator unreasonably implied the law.
The report revealed that the Financial Intelligence Unit (FIU) recommended the dismissal of Delio CEO Jung Sang-ho through a sanctions announcement on September 1. Delio claims this is a clear indication that financial authorities are pressuring Delio to shut down businesses rather than giving them a chance to revive. The Financial Intelligence Unit also suspended Delio for three months and fined it US$1.34 million (1.83 billion won).
The company also warn Assets seized by regulators could put its operations in jeopardy.
Delio CEO Jung Sang-ho said that these sanctions by the Financial Intelligence Unit leave a lot of room for unreasonable legal interpretation and arbitrary application. “Such actions by financial authorities may strangle the domestic virtual asset industry.”
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The main issue in the dispute is the interpretation of the current law, that is, whether lending companies that lend virtual assets as collateral are virtual asset operators, and whether the locking behavior constitutes “custody” of virtual assets. According to the Special Financial Services Act.
Delio argued that it is unclear whether virtual asset deposits and management products are considered financial products under current law. A lawyer from the firm pointed out that there are currently no provisions on virtual asset management business in laws and regulations related to virtual assets.
The lawyer said that the financial intelligence agency interpreted virtual asset deposits and management products as financial investment products without authorization and imposed sanctions, which was a case of misinterpretation.
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