Industry pushback is intensifying over KRW1, a won-pegged stablecoin from digital asset custody firm BDACS. Some in the market argue that the company's decision to describe its filing as a virtual asset service provider (VASP) as grounds for issuing and redeeming KRW1 in its white paper is serious enough to warrant stripping the firm of its VASP status. As complaints spread across the cryptocurrency industry, the Financial Services Commission has decided to examine the matter.
Financial and cryptocurrency industry officials said on the 21st that BDACS is stretching the scope of the current VASP filing system far beyond its intent.
Under the Act on Reporting and Using Specified Financial Transaction Information, the VASP filing system is a regulatory framework for anti-money laundering (AML) purposes and is separate from approval to issue a stablecoin. South Korea has yet to put in place any rules governing won-denominated coins. VASP business categories are divided into the sale and purchase of virtual assets, exchange, transfer, custody and management, and brokerage or intermediation of sales, purchases or exchanges. BDACS filed for only two of those categories: transfer, and custody and management. "There is a problem with filing as a custody and management provider and then explaining it as if issuance and redemption had also been authorized," a cryptocurrency industry official said. "Shouldn't regulators even consider canceling the acceptance of the VASP filing?"
Another industry official said, "Once an exchange between the won and KRW1 is involved, it could amount to trading or brokering virtual assets, but BDACS did not file for that business." Financial authorities said, "There appear to be parts that are not accurate in the white paper," adding that they "plan to look into the matter."
