Delio, a South Korea-based Bitcoin lender, is reportedly planning to launch an administrative lawsuit against local financial regulators, citing poor and incorrect interpretation of the law.

This new lawsuit comes after an investigation and fine imposed on the Bitcoin lending firm by the South Korean watchdog.

Delio to Sue South Korean Watchdogs

Earlier this month, The Financial Intelligence Unit (FIU) of South Korea recommended the dismissal of Delio CEO Jeong Sang-ho through a sanctions announcement. Moreover, the watchdogs imposed a 3-month business suspension and a fine of 1.896 billion Won.

These sanctions were based on Delio’s alleged failure to assess money laundering risks before offering new products and services as required by the Specific Financial Information Act. According to the FIU, Delio failed to adhere to the requirements for about 41 products.

Delio is preparing an administrative lawsuit in response to the FIU’s actions. Per the report, the allegations of embezzlement and fraud leveled against the firm by the Financial Service Committee have no basis. Delio notes that the regulator applied the law unfairly when there were no explicit rules regarding virtual asset deposit and management products.

CEO Jeong Sang-ho strongly criticizes the FIU’s sanctions as unreasonable legal interpretation and unfair application, warning of potential harm to the domestic virtual asset industry.

The lender believes the watchdog is applying pressure on it to shut down rather than an opportunity to correct its practices.

Earlier in the year, the FSC lodged a comprehensive investigation of Delio, leading to a halt of deposits and withdrawals of major virtual assets such as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) on June 14th. The investigation cited issues of breach of trust, fraud, and embezzlement associated with the network, with the report suggesting that complaints from victims triggered the investigation.

Legal Experts Criticize Watchdogs

Legal experts and KOL in South Korea have identified ambiguities on whether virtual asset-related deposit management products can be c