TL;DR
- Legislative push: Lawmakers introduced a bill to expand FIU Authority and let the agency directly investigate unregistered crypto operators.
- Enforcement gaps: Police suspended most probes into FIU referrals, highlighting limits in current FIU Authority over offshore companies.
- Regulatory goal: The amendment aims to strengthen FIU Authority so the agency can better enforce registration rules for crypto firms serving Korean users.
South Korean lawmakers are pushing a new legislative effort that would significantly expand the FIU’s investigative reach over unregistered crypto operators. The proposal seeks to give the agency more direct power to act on suspected violations, marking a shift from the current system where the FIU must rely on police and other authorities to pursue cases. The debate comes amid concerns that many offshore companies serving local users have avoided scrutiny despite repeated referrals from regulators.
Lawmakers Introduce Amendment to Expand FIU Powers
The bill, filed Thursday by People Power Party lawmaker Eom Tae‑young and nine colleagues, aims to revise the Act on Reporting and Using Specified Financial Transaction Information. If passed, it would broaden FIU Authority by allowing the agency to investigate suspected violations, analyze reported cases, file complaints, request criminal probes and share information directly with investigators.
Under the proposal, anyone could report potential breaches to the FIU, giving the public a channel to flag unregistered crypto activity. Supporters argue that expanding FIU Authority would close gaps that currently slow enforcement and leave room for offshore cryptocurrency operators to serve Korean customers without proper registration. The bill remains at the introduction stage and must clear the National Assembly before becoming law.
Enforcement Challenges Highlight Need for Reform
Today, the FIU can identify suspected unregistered operators but depends on police to act. According to Yonhap, 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. Many of these companies and individuals were reportedly based overseas, underscoring limits in current FIU Authority when dealing with foreign entities.
The FIU said in June that 28 providers were registered and that it had referred 40 suspected illegal operators to investigative authorities. Regulators believe stronger FIU Authority could improve follow‑through on these cases and help ensure that crypto companies serving South Korean users comply with registration rules. Lawmakers backing the amendment say enhanced FIU Authority is essential for maintaining oversight as the market evolves.
