South Korean lawmakers introduced an amendment on Thursday that would give the Financial Intelligence Unit (FIU) direct investigative authority over unregistered virtual asset service providers. The bill was filed by People Power Party lawmaker Eom Tae-young and nine colleagues, and it would revise the Act on Reporting and Using Specified Financial Transaction Information.
Under the proposal, any person could report suspected violations directly to the FIU. The agency could then investigate and analyze reported activities, file complaints, request criminal investigations, or share collected information with investigators. Supporters argue the change would close enforcement gaps that currently force the FIU to rely on police after identifying potentially unregistered operators.
Enforcement records show the limits of the current system. According to Yonhap, police suspended investigations or preliminary inquiries into 23 of 25 FIU referrals between August 2022 and August 2025, with many companies and related individuals based overseas. The FIU said in June that 28 virtual asset service providers held registrations in South Korea, while it had referred around 40 suspected illegal operators to investigative authorities.
Foreign businesses are required to register when they actively provide crypto services to South Korean residents. Authorities have identified several methods used by overseas platforms to reach local customers without registration, including promotion through Telegram, KakaoTalk, YouTube channels, and online communities. Some operators also offered direct exchanges between digital assets, Korean won, and other currencies.
South Korea is tightening broader crypto compliance rules as well. New foreign exchange requirements will add another compliance layer for cross-border crypto transfers from December 2026, requiring companies handling such transfers to register with the finance ministry. Courts have also reviewed several FIU enforcement actions against major South Korean crypto companies. A Seoul court overturned a partial suspension against Dunamu, while Bithumb and Coinone secured temporary court relief in separate regulatory disputes. The FIU bill must still pass the National Assembly before its proposed enforcement powers become law.
