A first-instance ruling said Darwin KS needed VASP registration to exchange Bitcoin, Ether and Tether into won, backing the FIU’s stance in a closely watched stablecoin case.
A South Korean court ruled that companies need virtual asset service provider registration to offer exchange services for stablecoins and other cryptocurrencies, siding with the Financial Intelligence Unit in a case involving blockchain fintech company Darwin KS. The Seoul Administrative Court’s Sixth Division dismissed Darwin KS’s lawsuit seeking to cancel the FIU’s request that virtual-asset service providers halt transactions with the firm. The case is the first court ruling on the legality of stablecoin exchange services in South Korea. Darwin KS had operated ATM services for foreign tourists that converted Bitcoin, Ether and Tether into South Korean won, with customer assets held by Korea Digital Asset, or KODA, while Darwin KS collected fees during the exchange process. The company argued it was only providing technical brokerage and settlement services and did not directly hold customer assets, while the FIU said fee-based participation in the exchange process made it a virtual-asset business under South Korea’s financial transaction reporting law. Darwin KS plans to appeal.