Headline: South Korea’s FIU flags about 40 unregistered crypto operators, warns users of scams and money‑laundering risks
South Korea’s Financial Intelligence Unit (FIU) has referred roughly 40 unregistered virtual asset service providers to investigators and issued a consumer warning about the growing risks posed by unauthorized crypto businesses operating in and targeting the country.
What the regulator found
- The FIU, part of the Financial Services Commission, said dozens of operators that have not registered under South Korea’s rules were reported to law enforcement. Under the Special Financial Transactions Act, any company offering virtual asset services in Korea must register with the FIU and meet requirements such as Information Security Management System (ISMS) certification. Foreign firms serving Korean residents are subject to the same registration rules.
- Unregistered operators fall outside the protections of the Virtual Asset User Protection Act and other financial rules. The FIU says this increases users’ exposure to personal data leaks, cyberattacks, undisclosed or excessive fees, and higher chances that platforms could be used to hide criminal proceeds or facilitate money laundering. Customers may also find it difficult or impossible to recover funds if an operator accepts payment but fails to deliver assets.
How illicit operators have been operating
- Investigators uncovered cases where overseas crypto businesses actively targeted South Korean users while masking their domestic links. Examples include recruitment campaigns run through Telegram and KakaoTalk open chat rooms, with customer support conducted in English to avoid regulatory scrutiny.
- Private currency exchange operations were also cited for selling stablecoins and other digital assets directly to international students, tourists, foreign workers and users seeking anonymity, often converting virtual assets into Korean won.
- The FIU warned about paid promotional activity on social media: some influencers and channel operators reportedly received fees from overseas service providers to advertise their platforms on YouTube, Telegram groups and chat rooms.
Regulatory response and reporting channels
- The FIU urged users to report suspected illegal virtual asset activity to the FIU itself, the Digital Asset eXchange Alliance (DAXA), or law enforcement. Complaints can also be filed directly with investigative authorities.
- A financial authority official said regulators will continue coordinated enforcement, keep monitoring via public tips, and expand joint investigations with related institutions.
Context: tougher cross‑border rules and booming remittances
- The warning arrives ahead of new cross‑border rules set to take effect in December. Amendments to the Foreign Exchange Transactions Act will require companies offering international digital asset transfer services to register with the Ministry of Economy and Finance and to report transactions through the Bank of Korea’s foreign exchange monitoring system.
- Interest in blockchain payments and remittances is rising: SBS Biz reported that overseas remittances processed through South Korea’s five largest won‑denominated crypto exchanges jumped from 34.02 trillion won in 2022 to 163.55 trillion won in 2025.
- Traditional and fintech players are also moving in: Toss Bank recently signed an agreement with the Solana Foundation to explore stablecoin‑based remittance and settlement services.
- Separately, the Financial Services Commission said it will expand its regulatory sandbox to cover digital asset legislation, including the Virtual Asset User Protection Act, creating more supervised testing avenues for blockchain and fintech services.
Bottom line for users
- Use only registered and ISMS‑certified platforms, be wary of aggressive recruitment via chat apps and paid social media promotions, and report suspicious services to the FIU, DAXA or police. Regulators are signaling they will step up enforcement as cross‑border oversight tightens and the remittance market expands.
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