South Korea Proposes Law to Grant FIU Direct Enforcement Power Against Unregistered Crypto Exchanges

According to Digital Asset, 10 lawmakers including Rep. Eom Tae-young of the People Power Party proposed an amendment to the Specific Financial Information Act on August 20, aiming to grant the Financial Intelligence Unit (FIU) direct enforcement power over unregistered virtual asset service providers. Under the amendment, any individual may report violations to the FIU, which, upon receiving a report or detecting suspected violations, can launch investigations and analyses, and transfer or notify cases to investigative agencies. The proposal notes that while current law imposes registration and anti-money laundering obligations on virtual asset service providers, it lacks direct enforcement measures against unregistered operators, leaving risks of money laundering, illegal cross-border transfers, and other crimes, which cannot be swiftly addressed through inter-agency coordination alone.