South Korea Bill Would Give FIU Direct Crypto Investigation Powers

Ten South Korean lawmakers want the Financial Intelligence Unit to investigate unregistered cryptocurrency operators without waiting for police. Eom Tae-young of the People Power Party submitted a bill to amend the Act on Reporting and Using Specified Financial Transaction Information, the law that governs how financial data is reported and used in South Korea.

The current system lets the FIU flag suspicious operators and refer them to law enforcement. After that handoff, the unit's role ends. It cannot push an investigation forward on its own. The proposed change would let the FIU file complaints and request criminal investigations directly. Individuals could also report suspected violations straight to the unit.

The numbers explain why the bill exists. Between August 2022 and August 2025, the FIU referred 25 unregistered virtual asset service providers to authorities. Twenty-three of those investigations were halted. That is a 92% suspension rate. Operators flagged by the FIU walked away clean in almost every case because the handoff created a bottleneck that rarely cleared.

Geography is part of the problem. Many suspected illegal operators run their businesses from overseas, which makes domestic enforcement harder. South Korean law requires any crypto firm serving local customers to register with the FIU. Enforcing that rule against a company operating from a different jurisdiction is genuinely complicated, even with a clear violation identified.

As of June, 28 providers had registered and complied with the requirement. Forty suspected illegal operators were referred to law enforcement over the same period. The track record suggests most of those referrals will stall.