South Korea Refers About 40 Unregistered Crypto Platforms to Law Enforcement
Under South Korea’s Act on Reporting and Using Specified Financial Transaction Information, domestic and foreign virtual-asset businesses serving the country must obtain Information Security Management System certification and register with the Korea Financial Intelligence Unit. Unlicensed platforms lack regulatory and cybersecurity reviews, potentially increasing the risks of personal-data breaches, misappropriation of funds and money laundering. The enforcement action is therefore significant for investor protection and market integrity.
By the time the case came to light, the Korea Financial Intelligence Unit had referred about 40 virtual-asset service providers that allegedly failed to register as required to law-enforcement authorities for further investigation into their operations in the South Korean market. No transaction amounts, complete list of operators or exact referral date were disclosed. The shift from regulatory warnings to referrals for investigation indicates that South Korea is accelerating substantive enforcement of its crypto-market rules.
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The history behind this eventSouth Korea Bill Seeks Broader FIU Powers Over Unregistered Crypto Firms
South Korea requires virtual asset service providers to register with the Korea Financial Intelligence Unit, an arm of the Financial Services Commission, and comply with anti-money laundering rules. Unregistered operators, many based overseas, can expose the market to money laundering, underground currency exchange and illicit remittances. Yet the Financial Transaction Reports Act does not clearly empower the FIU to investigate them directly, leaving enforcement dependent on police referrals and creating a regulatory gap when suspects and corporate entities sit beyond South Korean jurisdiction.
People Power Party lawmaker Um Tae-young introduced an amendment on Aug. 21 that would let anyone report suspected violations and authorize the FIU to investigate unregistered operators before referring cases to law enforcement. Police data showed the FIU referred 28 cases between August 2022 and January 2026; only two reached prosecutors, two remained under investigation and 24 were suspended. The FIU and the Digital Asset eXchange Alliance referred another 12 operators on June 9. Unregistered operations carry up to five years in prison or a 50 million won fine.
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