South Korea bills to broaden FIU investigative powers over unregistered crypto firms

South Korean lawmakers have introduced a bill to significantly expand the investigative authority of the Financial Intelligence Unit, aiming to close enforcement gaps that have allowed many unregistered cryptocurrency operators to serve domestic users without oversight. The proposed amendment would grant the FIU direct power to investigate suspected violations, a shift from the current system where the agency must rely on police and other authorities to pursue cases.

The legislation, filed on August 20 by People Power Party lawmaker Eom Taeyoung and nine colleagues, seeks to revise the Act on Reporting and Using Specified Financial Transaction Information. If passed, it would allow the FIU to investigate and analyze alleged violations, file formal complaints, request criminal investigations, and share information directly with law enforcement. The bill also proposes that any individual could report suspected regulatory breaches directly to the FIU, creating a new public channel for flagging unregistered crypto activity.

The push for reform comes amid documented challenges in enforcement. According to Yonhap, police suspended investigations or preliminary inquiries into 23 of 25...