South Korean lawmakers have introduced legislation to give the Financial Intelligence Unit (FIU) stronger authority to investigate unregistered cryptocurrency firms, while the Financial Services Commission (FSC) has pledged to accelerate consultations on the broader Digital Asset Framework Act.
People Power Party lawmaker Eom Tae-young and nine other lawmakers filed the bill on Thursday, proposing a new provision to the Act on Reporting and Using Specified Financial Transaction Information. Under the proposal, anyone could report suspected violations to the FIU, which would then investigate, file complaints, request criminal investigations, or share information with law enforcement. Supporters say this would close a gap between detection and formal investigation.
The push follows data reported by Yonhap that police suspended investigations or preliminary inquiries into 23 of 25 unregistered virtual asset service providers referred by the FIU between August 2022 and August 2025, largely because the operators were based overseas. South Korea currently requires crypto companies serving local customers to register with the FIU. The regulator said in June that 28 providers were registered and that it had referred 40 suspected illegal operators to investigative authorities.
In parallel, FSC Chairman Kim Byoung-hwan told the National Assembly’s Political Affairs Committee on Aug. 24 that the government would intensify consultations on the Digital Asset Framework Act. Lawmaker Lee Kang-il pressed officials to complete the proposal in time for a fall legislative session, warning that South Korea risks falling behind the United States and other major markets. Kim said the FSC would do its best to meet the timetable but did not provide a firm submission date.
The framework is expected to cover stablecoin issuance, virtual asset service provider requirements, disclosure obligations, internal controls and infrastructure resilience. Stablecoin rules remain a central issue, with the Bank of Korea supporting a bank-led model for won-denominated tokens because of implications for payments, monetary policy and financial stability. The government’s July roadmap also linked stablecoin legislation to central bank digital currency pilots, tokenized government bonds and plans for spot cryptocurrency exchange-traded funds.
Separately, South Korea has revised its Foreign Exchange Transactions Act to bring cross-border virtual-asset transfers under a formal regime. The law was promulgated on June 2 and takes effect in December after a six-month grace period. Companies providing cross-border virtual-asset transfer services will have to register with the Ministry of Economy and Finance and report overseas transactions through the Bank of Korea’s foreign-exchange reporting system.
