Delio Reveals Recovery Plans Days After Withdrawal Suspension

Delio, the company that recently suspended withdrawals, is now facing uncertainties as it plans to resume withdrawals gradually. Delio CEO Jeong Sang-ho acknowledged the unstable condition was brought on by the company’s reliance on Haru Investment and B&S Holdings.

Last week, Haru Invest, a company registered in Singapore and based in South Korea, announced an indefinite suspension of all deposit and withdrawal requests.

Delio Withdrawal Policies Remains Uncertain

The South Korean platform, a global crypto finance service provider, did not identify a repayment period or a method, reported Decenter. Meanwhile, Delio’s amount of damage is also uncertain, even though it indicated it would resume withdrawals. CEO Sang-ho noted that Delio’s fluid situation largely depends on the status of Haru Investment and B&S Holdings.

That said, Delio’s capacity to deliver the initial promised rate of return is in doubt. This will further complicate the situation if Haru Invest goes through bankruptcy proceedings. The CEO pledged to make up for the losses, but he withheld information on the timeline for payback. The local papers quoted him saying, “We will secure as much capital as possible to compensate, such as a paid-in capital increase by a third party.”

When Haru Invest ran into problems with one of its service providers—now identified as consignment operator B&S Holdings—the trouble started. On June 13, the site suspended withdrawals. Delio, which had trusted Haru Invest with part of its customers’ money, suffered as a result.

Delio quickly responded by stopping withdrawals on June 14 and implementing a telecommuting system the next day. CEO Jeong, however, expressed determination to restore normal operations. He announced plans to transition back to a regular working system in the upcoming week.

Lawsuits Follow Asset Freeze

Investors have filed a complaint alleging fraud against Haru Invest and Delio in the meantime. Reports find that law firm LKB & Partners represents around a hundred clients who claim to have suffered losses when the platforms suspended withdrawals. The accused include Haru Invest CEO Lee Hyung-soo and Delio CEO Jung Sang-ho. The victims seek damages for around 50 billion won ($39 million).

Both platforms, which offered double-digit yields, are accused of making risky trades and mismanaging consumer assets.

Delio is in a difficult situation as it deals with the fallout from the withdrawal suspension and Lugpool controversy. Delio must restore investor confidence. It needs to put a thorough recovery strategy in place because it relies on Haru Investment and the uncertainty surrounding its assets.