Bill Would Let South Korea’s FIU Directly Probe Unregistered Crypto Operators

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A bill has been proposed in South Korea to amend the Act on Reporting and Use of Specified Financial Transaction Information to allow the Financial Intelligence Unit to directly investigate unregistered virtual-asset operators and refer cases to investigators.

Digital Asset reported on August 21 that 10 lawmakers, including People Power Party lawmaker Um Tae-young, introduced the amendment on August 20.

The bill would allow anyone to report suspected violations of the law to the FIU chief. If a report is received or the FIU chief determines there are signs of a violation, the agency could take necessary steps, including investigating and analyzing the relevant facts.

It would also provide a legal basis for the FIU to file complaints with investigative authorities, request criminal investigations and provide necessary information based on the results of those inquiries.

The proposal said current law imposes registration and anti-money laundering obligations on virtual-asset service providers, but the FIU has had difficulty directly cracking down on unregistered operators such as so-called private coin exchange shops, limiting its response.

The sponsoring lawmakers said unregistered operators could be exploited for crimes including money laundering, illegal currency exchange and illicit overseas remittances. They added that the current system relies on cooperation between relevant agencies or referrals for investigation, making a swift response difficult.