South Korea Tightens Noose on Unlicensed Crypto Exchanges
Korean lawmakers have introduced a bill to strengthen the Financial Intelligence Unit's (FIU) authority over unlicensed cryptocurrency exchanges. The proposed legislation would grant the FIU the power to conduct preliminary investigations into potential violations before escalating matters to law enforcement agencies.
The current system has proven ineffective, with police discontinuing 23 out of 25 cases involving unlicensed operators referred by the FIU between August 2022 and August 2025. The implicated companies and individuals were predominantly situated in foreign jurisdictions.
The proposed changes aim to address regulatory loopholes exploited by international crypto service providers. These platforms have been marketing their services via social media, digital forums, and other online channels to access customers without domestic authorization.