South Korean lawmakers proposed giving the country’s financial intelligence unit additional powers to identify violations by unregistered virtual asset service providers and refer cases to law enforcement.
South Korean National Assembly member Eom Tae-young and nine other lawmakers introduced Bill No. 2220655, which seeks to strengthen oversight of unregistered cryptocurrency service operators. The bill would expand the authority of the Korea Financial Intelligence Unit (KoFIU) to respond to violations of virtual asset laws.
Current regulations require virtual asset service providers to register and comply with anti-money laundering requirements. However, KoFIU has limited authority to directly curb the activities of operators that provide services without registration, including so-called private cryptocurrency exchange offices.
The bill’s sponsors said such platforms could be used for money laundering, illegal cross-border transfers, and unauthorized foreign exchange transactions. Responses to such violations currently depend largely on coordination between KoFIU and other government agencies, as well as referrals to investigative authorities. According to the bill’s sponsors, this makes it more difficult to quickly halt illegal activity.
The bill would establish in law the right of any person to report suspected violations to the head of KoFIU. If the agency identifies signs of unlawful activity, it would be authorized to conduct the necessary reviews and analysis.
KoFIU would also receive direct authority to refer information on identified violations to the relevant law enforcement agencies, file criminal complaints, or formally request an investigation.
To implement these changes, lawmakers proposed adding a new Article 15-4 to existing legislation. The amendments are intended to narrow the regulatory gap between registered crypto companies subject to AML oversight and operators that provide similar services without registration.
South Korean authorities previously tightened regulation of the local crypto market on several occasions. In 2023, the government launched a cryptocurrency monitoring system, and in 2024, South Korean regulators stepped up oversight of cryptocurrency exchanges. In 2025, authorities initiated a comprehensive reform of the cryptocurrency sector. More recently, the government eliminated the Travel Rule threshold and tightened requirements for VASP registration and oversight of transactions involving overseas platforms and crypto wallets.
