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South Korea’s Financial Intelligence Unit might be getting a serious upgrade. A group of ten lawmakers, led by Eom Tae-young of the People Power Party, submitted a bill to expand the FIU’s authority to go after unregistered cryptocurrency businesses without waiting on police to do it for them.
The proposal targets the Act on Reporting and Using Specified Financial Transaction Information — basically the core law governing how financial data gets reported and acted on in South Korea. Right now, the FIU can spot unregistered operators, flag them, refer them to law enforcement, and then… wait. That’s the problem. The unit has no power to push the investigation forward on its own. It hands the file over and hopes someone picks it up. The new bill would change that. It would let individuals report suspected violations directly, and it would allow the FIU to file complaints and request criminal investigations without routing everything through police first. Faster, more direct, less dependent on agencies that are juggling a lot of other priorities.
And the numbers make the case pretty clearly.
23 Out of 25 Investigations Suspended
Between August 2022 and August 2025, the FIU referred cases involving 25 unregistered virtual asset service providers to authorities. Twenty-three of those investigations were halted. That’s not a minor leak in the system — that’s basically the whole pipe. Operators flagged by the FIU were walking away clean in almost every case, largely because the handoff to law enforcement created a bottleneck that rarely got unclogged.
A big part of the problem is geography. Many of the suspected illegal operators run their businesses from overseas, which makes it harder for domestic agencies to act. South Korean law is clear: any crypto firm serving local customers has to register with the FIU. But enforcing that rule against a company operating out of a different jurisdiction is genuinely complicated, even with the best intentions. The FIU can identify the violation. Getting someone prosecuted for it is a different matter entirely.
As of June, 28 providers had registered and complied with the requirement. Meanwhile, 40 suspected illegal operators were referred to law enforcement. What happened to most of those referrals is probably not hard to guess given the track record above.
Bill Still Needs National Assembly Sign-Off
The legislation is early-stage. It can’t become law without National Assembly approval, and no timeline for a vote has been made public. So it’s unclear yet when — or whether — this actually moves forward. The bill’s ten co-sponsors are all on record supporting expanded FIU powers, but that’s still a small slice of the Assembly, and the path through the legislative process isn’t guaranteed.
What’s clear is that the current setup isn’t working well enough. The FIU has been doing its job — identifying unregistered operators, building cases, making referrals — but the enforcement side keeps stalling. Granting the unit the ability to file complaints and push for criminal investigations directly would cut out at least one layer of bureaucratic delay.
Crypto regulation across Asia has been tightening over the past few years, with multiple governments wrestling with the same basic challenge: exchanges and operators that serve local users but aren’t registered locally, often because they’re physically located somewhere else. South Korea’s situation isn’t unique, but the scale of the suspended-cases problem is striking. Twenty-three out of twenty-five is a failure rate that’s hard to explain away.
The bill would also open up a citizen-reporting mechanism, letting individuals flag suspected violations to the FIU. That’s a meaningful shift. It brings enforcement closer to the ground level and gives the unit more entry points for identifying bad actors before they get too entrenched.
Eom Tae-young’s group isn’t the first to push for stronger crypto oversight in South Korea, and it won’t be the last. The country has been building out its digital asset regulatory framework for years, and each new piece of legislation tends to close a gap that the previous one left open. Whether the National Assembly moves quickly on this one or lets it sit is anyone’s guess right now.
No official timeline has been disclosed. The bill awaits a vote.
Frequently Asked Questions
What powers would the new South Korean bill give the FIU over crypto firms?
The bill would allow the FIU to directly file complaints and request criminal investigations against unregistered crypto operators, rather than relying solely on law enforcement agencies to act after receiving referrals.
How many unregistered crypto operator investigations were suspended in South Korea between 2022 and 2025?
Between August 2022 and August 2025, 23 out of 25 investigations into unregistered virtual asset service providers were halted by authorities.
Why It Matters
This legislative move highlights South Korea's increasing focus on regulating the cryptocurrency sector, reflecting a broader global trend towards tighter oversight of digital assets. By empowering the Financial Intelligence Unit to act independently against unregistered crypto businesses, the proposal could enhance the efficiency of investigations and potentially instill greater confidence among investors and institutional players in the market. As regulatory frameworks evolve, such measures may also influence the behavior of crypto businesses operating in South Korea, prompting compliance and transparency to avoid penalties.
