- Ten South Korean lawmakers, led by People Power Party representative Eom Tae-young, filed bill 2220655.
- The bill would let the FIU investigate unregistered crypto operators, file complaints, and request criminal investigations.
- The FIU counts 28 registered providers and 40 suspected illegal operators already referred to investigators.
Ten South Korean lawmakers proposed a bill that would allow the Financial Intelligence Unit to pursue unregistered crypto operators and refer them to prosecutors.
The South Korean police have shelved almost every case the FIU has passed on to them.
Ten lawmakers file bill #2220655
The measure was introduced on Thursday by Rep. Eom Tae-young of the People Power Party and nine others. It amends the Act on Reporting and Using Specified Financial Transaction Information by inserting a new provision, Article 15-4.
According to the legislative tracking portal of South Korea, the bill was referred on August 21 to the political affairs committee of the National Assembly, which oversees the Financial Services Commission.
The bill still has to go through committee review and a floor vote. Wording can change along the way, and bills filed by individual legislators often die unpassed when an Assembly term ends.
Under the proposal, anyone could report a suspected violation directly to the FIU. The unit could then investigate the allegation, analyze it, file a complaint, request a criminal investigation, or pass the information to investigators.
The FIU is part of the Financial Services Commission (FSC) and operates the registration regime that crypto firms serving Korean customers must join.
As of June, it had 28 registered providers and said it had referred 40 suspected illegal operators to investigative authorities.
Police shelved 23 of 25 FIU referrals
Between August 2022 and August 2025, the FIU referred 25 unregistered virtual asset service providers to police for investigation.
But police suspended investigations or preliminary inquiries in 23 cases. Most of these firms and their people were said to be located overseas, making them difficult to access using the current process.
Today, the FIU can flag a suspected unregistered operator, but has to lean on police and other agencies to pursue it.
The bill’s statement of reasons contends that reliance on inter-agency cooperation and formal investigation requests makes a fast response difficult.
It warns that unregistered venues, which it calls “private coin exchange offices,” can be used for money laundering, illegal currency exchange, and illegal overseas remittance.
South Korea’s Cabinet approved an amendment on August 11 that removes the 1 million won reporting threshold for crypto transfers.
Registration provisions became effective on August 20, and the full Travel Rule expansion will follow in February 2027, per a past Cryptopolitan report. The package also introduced a 200% debt-ratio cap on exchange operators and stricter vetting of shareholders.
The FIU only permitted two new virtual asset service providers in 2025. That’s down from four the year before. According to previous coverage by Cryptopolitan, the average time it took to get approved went up from 11 months to 16 months.
Suspicious transaction reports rose to 36,684 last year in South Korea, and about 90% of them were linked to illegal cross-border remittance arrangements.
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FAQs
Who introduced the South Korea crypto FIU bill and when?
People Power Party lawmaker Eom Tae-young and nine other legislators filed the bill, numbered 2220655.
What new power would the FIU gain?
The FIU could investigate and analyze suspected violations by unregistered crypto operators, file complaints, and request criminal investigations directly.
Is the bill already law in South Korea?
No. It is a member's bill that still must pass committee review and a plenary vote.
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Randa Moses
Randa Moses is an editor and reporter at Cryptopolitan covering tech, AI, robotics, crypto, scams, and hacks. She has worked in the crypto space since 2017. She held roles at Forward Protocol, AmaZix, and Cryptosomniac. Randa holds a degree in Electrical and Electronics Engineering from the University of Bradford.
