South Korean digital asset savings and lending firm, Delio, has taken the necessary step of temporarily freezing withdrawals in order to protect the assets of its customers. In an official notice on their website, Delio announced the suspension, effective as of June 14, attributing it to a sharp increase in market volatility and growing confusion among investors.
Delio expressed its commitment to ensuring the safety of its customers’ assets during this uncertain period and pledged to swiftly gather all relevant information pertaining to the situation. The decision to halt withdrawals follows a similar action taken by Haru Invest, another South Korean earning platform that encountered issues with one of its service providers.
Haru Invest, with over 80,000 customers across 140 countries and approximately $1 billion in assets under management, suspended deposits and withdrawals due to the aforementioned service provider issue. Delio, in a related move, cited similar figures on its website, managing 41,743 BTC ($1.1 billion) and 118,083 ETH ($206 million) on behalf of its users.
Both Delio and Haru Invest offer crypto savings accounts with impressive annual percentage yields (APY) surpassing 10%. Haru Invest even boasts products that provide returns exceeding 50% APY. Additionally, Delio facilitates crypto-backed loans, where users are required to provide crypto collateral exceeding the requested loan amount.
The decision to freeze withdrawals by Delio serves as a proactive measure to shield customers from potential losses in the face of volatile market conditions. Similar platforms, including Celsius and BlockFi, faced the necessity of freezing withdrawals and eventually filing for bankruptcy last year, as the declining crypto market severely limited their ability to meet obligations to creditors.
The crypto industry has seen instances where firms have encountered challenges in handling user deposits and withdrawals. Haru Invest’s recent withdrawal suspension due to a service partner issue further underscores the complexities faced by digital asset management platforms.
Crypto lending firms have also faced hurdles in North America due to securities legislation. For instance, Nexo settled with the SEC for $45 million in January and subsequently decided to withdraw from the United States after reaching a regulatory impasse. Canadian Securities Regulators have banned crypto margin trading and imposed restrictions on lending platforms like LEDN, which can no longer offer savings products to Canadian customers.
Delio’s decision to temporarily suspend withdrawals is driven by its commitment to protecting customers’ assets amidst market volatility. By promptly addressing the situation and implementing contingency plans, Delio aims to rectify the issue and ensure a secure environment for its users.
