South Korea Proposes New Law to Strengthen Oversight of Unregistered Crypto Firms

South Korean Lawmakers Introduce Bill to Crack Down on Unregistered Crypto Firms

A group of South Korean lawmakers has proposed a new bill to give the country’s Financial Intelligence Unit (FIU) more authority to investigate and act against unregistered crypto businesses. The bill, introduced by lawmaker Eom Tae-young and nine others, aims to amend an existing financial law to allow the FIU to directly investigate suspected violations and refer cases to law enforcement.

Currently, the FIU can identify unregistered crypto operators but must rely on police or other authorities to pursue investigations. The new proposal would let anyone report suspected violations to the FIU, which could then analyze the case, file complaints, or request criminal investigations.

What the Bill Would Change

• The FIU could investigate suspected violations of crypto regulations on its own.
• The agency could refer unregistered crypto operators directly to law enforcement.
• Anyone could report suspected illegal crypto activity to the FIU.
• The bill must still pass the National Assembly to become law.

Why the Bill Was Proposed

Under the current system, the FIU has limited power to act against unregistered crypto firms. Between August 2022 and August 2025, police suspended investigations into 23 of 25 unregistered virtual asset service providers referred by the FIU, according to news agency Yonhap. Many of these companies were reportedly based overseas.

South Korean law requires crypto companies serving local customers to register with the FIU. As of June, 28 providers were registered, while the regulator had referred 40 suspected illegal operators to investigative authorities.

What Is Confirmed

• The bill was introduced by lawmaker Eom Tae-young and nine other lawmakers.
• It aims to amend the Act on Reporting and Using Specified Financial Transaction Information.
• The FIU currently relies on police to investigate unregistered crypto firms.
• 28 crypto providers are registered with the FIU, while 40 suspected illegal operators have been referred.

What Is Still Unclear

• Whether the bill will pass the National Assembly.
• How the new powers would be enforced against overseas-based firms.
• When the changes would take effect if the bill becomes law.

Why This Matters for Crypto Businesses in South Korea

The bill could make it harder for unregistered crypto firms to operate in South Korea. If passed, the FIU would have more direct authority to investigate and refer cases, potentially increasing compliance pressure on crypto businesses serving South Korean customers.

Sources

• Cointelegraph
• Official Bill Proposal (Korean)
• Yonhap News Agency
• Financial Services Commission (FSC) Announcement