South Korea bill expands FIU authority over unregistered crypto

A group of lawmakers led by People Power Party member Eom Tae-young filed a bill on Thursday to expand the Financial Intelligence Unit’s authority over virtual asset service providers that operate without registration. The draft adds a provision to the Act on Reporting and Using Specified Financial Transaction Information to allow any member of the public to report suspected violations to the FIU. Under the proposal the agency could investigate and analyze reports, submit complaints to authorities, request criminal probes and share information with investigative bodies.

Under the current framework the FIU can identify suspected unregistered operators but relies on police and other agencies to carry out formal investigations. Officials reported that between August 2022 and August 2025 investigations or preliminary inquiries were suspended in 23 of 25 cases referred by the FIU. Authorities attribute part of that pattern to many companies and related individuals being based overseas.

South Korea requires crypto firms that serve local customers to register with the FIU. The regulator reported in June that 28 providers were registered and that it had referred 40 suspected illegal operators to investigative authorities.

Proponents argue giving the FIU direct investigative powers would allow faster action and closer coordination with prosecutors and police. The bill remains at the introduction stage and must clear the National Assembly before it can become law.

Lawmakers backing the measure cited enforcement gaps tied to cross-border platforms and the rise of services targeting South Korean customers without local registration. If enacted, the amendment would give the FIU explicit authority to pursue unregistered virtual asset businesses beyond identification and referral.