South Korea Cracks Down on Unregistered Crypto Exchanges with Enhanced Enforcement Powers

South Korea is pushing for enhanced authority over unlicensed crypto exchanges through proposed legislation that would grant the Financial Intelligence Unit (FIU) expanded enforcement capabilities. Representative Eom Tae-young, along with nine co-sponsors, submitted a proposal to modify the Act on Reporting and Using Specified Financial Transaction Information.

The bill aims to provide the FIU with the authority to conduct preliminary investigations into potential violations before escalating matters to law enforcement agencies. This would enable individuals to submit reports directly to the FIU, which could then conduct comprehensive investigations and analysis.

Historically, South Korea has faced challenges in enforcing regulations against international crypto platforms that target domestic consumers without proper registration. Between August 2022 and August 2025, police discontinued investigations into 23 out of 25 cases referred by the FIU, with most companies based overseas.