Korea’s Delio, Haru Invest suspend withdrawals and deposits

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Delio, a South Korean crypto lender, announced yesterday that it has suspended customer deposits and withdrawals, according to a statement on its website.

“In order to safely protect the assets of customers currently in custody, Delio will inevitably suspend withdrawals temporarily as of June 14,” the platform said. The suspension went into effect at 6:30 p.m. Korean time.

Delio said the suspension was due to volatility in the market in “the aftermath of the recent suspension of deposit and withdrawal of digital assets at Haru Invest.”

Haru is a digital exchange founded in South Korea but headquartered in Singapore.

The size of Delio’s portfolio has some on social media concerned that this could be the start of another bankruptcy due to overleveraged counterparties.

Delio’s website says that as of June 15, it has 41,740 bitcoin and 118,033 ether under management, for an estimated total value of US$1.3 billion. The firm also has a large amount of altcoins but the value of those assets is unclear.

However, some users on Twitter contested Delio’s claims regarding its holdings.

Adam Cochran, a crypto investor and frequent commentator on Twitter, compared Delio’s business model to BlockFi, the US-based digital lender that declared bankruptcy due to its exposure to FTX. Delio lent Ripple, Bitcoin, Ether, and Tether to customers and offered returns of up to 10% on crypto deposits.

Delio CEO James Jung could not immediately be reached for comment.

Haru Invest, which promises returns of up to 25% on crypto deposits, announced that it was halting deposits and withdrawals on Tuesday night. In a series of posts, it blamed the suspension on B&S Holdings, one of its “consignment operators.”

The platform said it had discovered that information provided by B&S Holdings contained false information, “thereby deceiving the company and our users.”

Haru wrote on its website that the immediate suspension of transactions was necessary to protect its investors, and that it is “currently engaging in a fact-finding process against the operator in question.” It denied that the suspension was a “rug pull.”

According to an April 2023 update, Haru has US$1 billion in assets under management. The firm says that it has more than 80,000 users in over 140 countries.