South Korea Pushes to Grant FIU Greater Authority Over Unlicensed Cryptocurrency Platforms
The legislative measure would enable the Financial Intelligence Unit to conduct investigations into alleged infractions and forward unlicensed virtual asset operators straight to authorities.
South Korean legislators have put forward legislation designed to modify current financial regulations and broaden the Financial Intelligence Unit's (FIU) investigative powers over cryptocurrency businesses operating without proper registration.
The legislative proposal was submitted on Thursday by Eom Tae-young, a lawmaker from the People Power Party, alongside nine additional co-sponsors. The bill seeks to introduce a fresh provision into the Act on Reporting and Using Specified Financial Transaction Information.
According to the terms of the proposal, any individual would be permitted to submit reports regarding suspected breaches of the law to the FIU. The regulatory body would gain the authority to conduct investigations and perform analysis of purported infractions, submit formal complaints to appropriate governmental bodies, initiate requests for criminal probes, or furnish information to investigating officers.
The legislative measure currently stands at the introductory phase and requires approval from the National Assembly before any modifications to existing legislation can take effect.
The existing framework allows the FIU to detect potentially unregistered operators, however, the agency must depend on police departments and additional law enforcement entities to conduct follow-up investigations.
Law enforcement authorities suspended investigations or preliminary examinations into 23 out of 25 unregistered virtual asset service providers that were forwarded by the FIU during the period spanning August 2022 to August 2025, as reported by Yonhap. The businesses in question and associated individuals were allegedly operating from foreign locations.
Cryptocurrency platforms providing services to customers in South Korea are required to complete registration with the FIU. In June, the regulatory authority disclosed that 28 service providers had completed the registration process and confirmed that it had forwarded 40 operators suspected of illegal activities to investigative bodies.