Ten members of South Korea’s National Assembly, led by People Power Party lawmaker Eom Tae-young, submitted new legislation on Thursday aimed at reshaping how the country’s financial watchdog handles crypto crime, as per local media news reports. The bill would amend the Act on Reporting and Using Specified Financial Transaction Information, widely referred to as the Specific Financial Information Act, to significantly broaden what the Financial Intelligence Unit is allowed to do once it suspects wrongdoing.
At the center of the proposal is a mechanism that doesn’t presently exist, a direct line for ordinary citizens to flag suspected violations straight to the FIU. Once such a tip comes in, the agency itself would be empowered to dig into the matter, analysing the alleged conduct before deciding whether the situation calls for escalation.
Lawmakers also want to give the agency sharper enforcement tools beyond just gathering information. Under the draft bill, the FIU could lodge formal complaints with the appropriate authorities, push for criminal investigations to be opened, and turn over evidence it collects to whichever investigators end up handling a case. None of this is law yet, however. The bill still needs to make its way through the full National Assembly before any of these new powers become reality.
The move assumes significance as at present FIU’s job largely ends once it identifies an operator it believes is running unregistered, at which point the case gets kicked over to police or other agencies to actually pursue.
As per local media reports, out of 25 unregistered virtual asset service providers the FIU referred to police between August 2022 and August 2025, investigations or preliminary reviews were dropped in 23 of those cases. Many of the companies and people involved were reportedly located outside South Korea, a factor that likely made pursuing them far harder once the case left the FIU’s hands.
That pattern of stalled follow-through appears to be exactly why lawmakers are now proposing to let the FIU take matters into its own hands rather than relying entirely on police to close the loop.
Foreign firms aren’t exempt from South Korea’s registration rules either. Any company, domestic or foreign, offering virtual asset services to people living in South Korea is legally required to register with the FIU. Compliance numbers suggest a sizable gap remains between the rule and reality. As of June, the FIU counted just 28 registered virtual asset service providers nationwide, even as it had already referred roughly 40 suspected illegal operators to investigators for potential action.
