TLDR
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South Korea lawmakers seek broader FIU powers over unregistered crypto firms
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FIU could investigate suspected crypto violations before referring cases to police
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Bill targets enforcement gaps involving unregistered overseas crypto providers
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Police halted 23 of 25 FIU referrals involving unregistered crypto operators
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Cross-border crypto rules will add another compliance layer from December 2026
South Korea lawmakers have proposed new enforcement powers for the Financial Intelligence Unit against unregistered crypto businesses. The bill would allow the FIU to investigate suspected violations before referring cases to other authorities. The proposal responds to enforcement gaps involving foreign crypto operators serving South Korean customers.
South Korea Bill Expands FIU Investigation Powers
People Power Party lawmaker Eom Tae-young and nine lawmakers introduced the amendment on Thursday. The proposal would change the Act on Reporting and Using Specified Financial Transaction Information. It would give the FIU broader authority over suspected unregistered virtual asset service providers.
Under the bill, any person could report suspected legal violations directly to the FIU. The agency could then investigate and analyze the reported activities before deciding its next action. It could also file complaints, request criminal investigations, or send collected information to investigators.
South Korea currently requires crypto businesses serving local customers to complete registration with the FIU. However, the agency largely relies on police after identifying companies that may operate without registration. The proposed amendment would give the FIU a larger role during the initial enforcement process.
Overseas Crypto Operators Drive Enforcement Concerns
Enforcement records have highlighted problems involving suspected operators based outside South Korea. Police suspended investigations or preliminary inquiries into 23 of 25 FIU referrals between August 2022 and August 2025. Yonhap reported that the companies and related individuals were mainly located overseas.
The FIU said in June that 28 virtual asset service providers held registrations in South Korea. Meanwhile, the regulator had referred around 40 suspected illegal operators to investigative authorities. Foreign businesses must also register when they actively provide crypto services to South Korean residents.
Authorities have identified several methods used by overseas platforms to reach customers without local registration. Some businesses promoted crypto services through Telegram, KakaoTalk, YouTube channels, and online communities. Others offered direct exchanges between digital assets, Korean won, and other currencies.
South Korea Tightens Wider Crypto Compliance Rules
South Korea has also strengthened oversight of registered exchanges and cross-border digital asset transactions. Earlier proposals targeted overseas-linked transfers and suspicious transaction reporting requirements for domestic trading platforms. Local exchanges argued that broad reporting thresholds could sharply increase compliance workloads.
Courts have also reviewed several FIU enforcement actions against major South Korean crypto companies. A Seoul court overturned a partial suspension against Dunamu following allegations involving unregistered overseas platforms. Bithumb and Coinone also secured temporary court relief in separate regulatory disputes.
New foreign exchange rules will add another compliance layer for cross-border crypto transfers. Companies handling such transfers must register with the finance ministry when the framework starts in December. The FIU bill must still pass the National Assembly before its proposed enforcement powers become law.