A bipartisan group of South Korean lawmakers has introduced legislation to strengthen oversight of the cryptocurrency sector by expanding the powers of the Financial Intelligence Unit (FIU).
The proposed amendment to the Act on Reporting and Using Specified Financial Transaction Information would enable the FIU to directly investigate suspected violations of registration requirements for virtual asset service providers (VASPs). Under the current framework, the FIU identifies unregistered operators but relies on police and other agencies to pursue legal action, a process that has seen limited results.
Between August 2022 and August 2025, police suspended investigations into 23 of 25 unregistered VASPs referred by the FIU, according to Yonhap reports. The entities and individuals involved were reportedly based overseas, complicating enforcement efforts.
The bill, filed by People Power Party lawmaker Eom Tae-young and nine co-sponsors, would allow any individual to report suspected violations to the FIU. The agency would then be empowered to analyze alleged breaches, file complaints with authorities, request criminal investigations, or share information with investigators. The legislation remains at the introduction stage and requires passage by the National Assembly to take effect.
South Korea requires crypto firms serving domestic customers to register with the FIU. As of June, 28 providers had completed registration, while the regulator had referred 40 suspected illegal operators to investigative bodies.
