South Korean lawmakers seek expanded FIU powers over unregistered crypto firms

A group of South Korean lawmakers has introduced a bill to amend an existing financial law and expand the Financial Intelligence Unit’s (FIU) authority to investigate unregistered crypto businesses.

On Thursday, People Power Party lawmaker Eom Tae-young and nine other lawmakers filed the bill, which aims to add a new provision to the Act on Reporting and Using Specified Financial Transaction Information. 

Under the proposal, anyone could report suspected violations of the law to the FIU. The agency could investigate and analyze alleged violations, file complaints with the relevant authorities, request criminal investigations or provide information to investigators. 

The bill remains at the introduction stage and must pass the National Assembly before it can amend the existing law.

Under the current system, the FIU identifies suspected unregistered operators but relies on police and other authorities to pursue investigations. 

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, according to Yonhap. The companies and related individuals were reportedly based overseas. 

Crypto companies serving South Korean customers must 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. 

Related: South Korea drops Travel Rule threshold for crypto transfers