South Korean lawmakers have submitted a bill that would widen the Financial Intelligence Unit’s authority over crypto businesses operating without registration. The proposal was filed Thursday by People Power Party lawmaker Eom Tae-young and nine other lawmakers as an amendment to the Act on Reporting and Using Specified Financial Transaction Information.
If adopted, the change would give the FIU a more direct role in handling suspected violations, rather than leaving most follow-up work to police and other investigative bodies. The measure is still at an early stage and would need approval from the National Assembly before any change takes effect.
What the bill would change
The proposal would create a new provision allowing anyone to report suspected breaches of the law to the FIU. It would also authorize the agency to investigate and analyze alleged violations involving unregistered crypto operators.
In addition, the FIU would be able to file complaints with the relevant authorities, request criminal investigations directly or provide information to investigators. That would mark an expansion from its current role, which is centered on identifying suspected illegal activity and referring cases onward.
Why lawmakers are seeking broader powers
The push comes amid concerns that referrals from the FIU have not consistently led to active investigations. According to Yonhap, police suspended investigations or preliminary inquiries in 23 of 25 cases involving unregistered virtual asset service providers that had been referred by the FIU between August 2022 and August 2025.
Yonhap reported that the companies and related individuals in those cases were based overseas. The reported outcome has added weight to arguments for giving the FIU stronger tools to pursue alleged violations more directly.
Current rules for crypto providers
Under South Korea’s existing framework, crypto companies that serve customers in the country are required to register with the FIU. The regulator monitors the sector and can identify suspected operators that may be working outside the rules.
The FIU said in June that 28 providers were registered. At that time, it also said it had referred 40 suspected illegal operators to investigative authorities, underscoring the gap between registration requirements and suspected noncompliance.
What happens next
The bill has only been introduced and is not yet law. It must go through the National Assembly before it can amend the current statute and formally expand the FIU’s enforcement powers.
For now, the confirmed next step is legislative review. Until any amendment is passed, the existing system remains in place, with the FIU continuing to refer suspected unregistered crypto businesses to police and other authorities for further action.
Source: cointelegraph.com