New Crypto Oversight Rules
South Korean Lawmakers Propose Expanded FIU Authority to Regulate Unregistered Crypto Exchanges
Key Points
Yonhap coverage highlights enforcement gaps by noting that police suspended or did not launch full investigations into 23 of 25 unregistered virtual asset service providers referred by the FIU between Aug. 2022 and Aug. 2025, with many operators reportedly based overseas, underscoring cross-border challenges.
Regulatory scope in practice shows 28 VASPs were registered in Korea and the FIU had referred 40 suspected illegal operators to investigative authorities, illustrating the scale of activity the regime is attempting to bring into formal oversight.
The proposed amendment would give the FIU a formal basis to file complaints with investigative authorities and to request criminal investigations, enabling direct referrals rather than relying solely on other agencies to act.
The bill explicitly targets unregistered operators such as 'private coin exchange shops,' illustrating the type of entities the reform aims to shut down or bring into compliance.
South Korea's lawmakers are moving to give the Financial Intelligence Unit (FIU) new power to directly investigate unregistered crypto exchanges. Crypto News The bill, introduced by People Power Party lawmaker Eom Tae-young and nine colleagues, would let the FIU file complaints and request criminal probes into suspected illegal operators instead of waiting for other agencies to act.
The move targets a major enforcement gap. Yonhap Between August 2022 and August 2025, police suspended or refused to fully investigate 23 of 25 unregistered operators the FIU had referred. The bill aims to close this gap and bring Korea into line with global efforts to crack down on illicit crypto activity.
FIU Gets New Tools to Fight Crypto Operators
Under the proposed amendment, any person could report suspected violations directly to the FIU. Crypto Times The FIU could then investigate, analyze evidence, and refer cases to authorities for criminal prosecution. Currently, the FIU spots illegal operators but must rely on police and prosecutors to pursue them—a system that often fails.
The bill also targets specific entities like 'private coin exchange shops.' CoinCodeCap If passed, unregistered platforms could face higher scrutiny or forced closure. The law would amend the Act on Reporting and Using Specified Financial Transaction Information, which handles money laundering and financial crime.
Why Police Haven't Cracked Down on Illegal Exchanges
South Korea's crypto enforcement suffers from weak follow-through. Yonhap Of 25 unregistered operators referred by the FIU over three years, police suspended investigations into 23. Many operate from overseas, making cross-border enforcement difficult. This pattern has allowed illegal platforms to continue operating despite FIU detection.
The scale of the problem is substantial. Crypto Economy The FIU had referred 40 suspected illegal operators to authorities, while only 28 VASPs (virtual asset service providers) operate legally in Korea. This imbalance shows how many unregistered platforms exist outside the regulatory system.
Korea Joins Global Push to Regulate Crypto
South Korea's proposed bill aligns with worldwide regulatory trends. Crypto News Countries are moving to tighten oversight of virtual assets and target illicit activity. The FIU's new direct probe authority would let Korea enforce its rules more aggressively against both domestic and international firms operating in the country.
The bill still faces a long road. Crypto Times It must pass the National Assembly before becoming law. If enacted, the measure could reshape Korea's crypto landscape by forcing unregistered operators to either comply or shut down.
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