South Korean lawmakers have introduced legislation that would give the Financial Intelligence Unit direct authority to investigate suspected unregistered crypto businesses instead of relying mainly on police referrals.

Yonhap reported that People Power Party lawmaker Eom Tae-young and nine other lawmakers filed the amendment on Thursday, proposing new powers under the Act on Reporting and Using Specified Financial Transaction Information, commonly known as the Specific Financial Information Act.

Under the bill, any person could report a suspected violation of the law directly to the FIU. Once a report is received, the financial intelligence agency would be allowed to investigate and analyze the suspected conduct before deciding whether further action is required.

The proposal would also allow the FIU to file complaints with relevant authorities, request criminal investigations, and hand information gathered during its review to investigators. Such powers would change the current process, under which the FIU can identify suspected unregistered operators but must depend on police and other investigative agencies to pursue most cases.

The bill has only been introduced and must pass the National Assembly before the proposed changes can take effect.

FIU could directly investigate unregistered crypto businesses

Lawmakers proposed the additional powers after enforcement data raised questions over how effectively cases involving overseas crypto operators were being pursued once they left the FIU.

According to Yonhap, police suspended investigations or preliminary inquiries into 23 of the 25 unregistered virtual asset service providers referred by the FIU between August 2022 and August 2025.

The companies and people connected to the cases were reportedly located outside South Korea, making investigations more difficult for domestic law enforcement agencies.

Giving the FIU investigative and analytical powers at an earlier stage would allow the agency that first identifies suspected registration violations to collect information before a case moves to another authority.

South Korea requires companies providing virtual asset services to residents of the country to register with the FIU, including foreign companies that actively serve South Korean customers.

As crypto.news previously reported, the FIU said in June that only 28 virtual asset service providers were registered at the time, while about 40 suspected illegal operators had been referred to investigative authorities.

The regulator said foreign businesses must follow the same registration requirements when they provide services to South Korean residents. Companies seeking registration must also meet local compliance requirements, including Information Security Management System certification.

Overseas operators have remained a key FIU enforcement problem

The FIU’s June enforcement warning provided details on how some unregistered foreign crypto businesses were reaching South Korean customers while attempting to limit their visible presence in the country.

According to the agency, some overseas operators recruited customers through Telegram and KakaoTalk open chat rooms while offering customer service in English, a setup regulators said could make their domestic activities less obvious.

Authorities also identified private currency exchange businesses selling stablecoins and other virtual assets to international students, tourists, foreign workers and people seeking transactions without disclosing their identities.

Some operators exchanged digital assets directly for Korean won or other fiat currencies, while promoters were paid to advertise foreign crypto services through YouTube channels, Telegram groups and online communities, the FIU said.

The agency warned that customers using unregistered services could face exposure to fraud, hacking and personal data leaks. Because such businesses operate outside the registered system, the FIU also said users could have difficulty recovering funds when an operator failed to deliver purchased assets.

Money laundering has remained another concern for regulators. The FIU said unauthorized crypto platforms and private exchange services could be used to conceal criminal proceeds or facilitate transfers that avoid standard checks applied by registered financial firms.

The newly introduced bill would allow the agency to pursue suspected violations of the Specific Financial Information Act itself before requesting assistance from another investigative body.

South Korea has tightened AML rules for registered exchanges too

Regulatory attention has not been limited to companies operating without registration.

Earlier this year, domestic exchanges objected to proposed changes that would require them to report overseas-linked crypto transfers worth at least 10 million won as suspicious transactions.

A May regulatory proposal drew objections from the Digital Asset Exchange Alliance, which represents registered virtual asset service providers in South Korea.

DAXA estimated that the rule could increase annual suspicious transaction reports at Upbit, Bithumb, Coinone, Korbit and Gopax from about 63,000 to more than 5.4 million.

The association argued that applying an automatic monetary threshold could cause large numbers of ordinary overseas transfers to be reported regardless of the risk attached to the customer or counterparty.

The dispute also involved the treatment of foreign platforms. Regulators have sought stricter controls on transactions involving overseas virtual asset service providers, while local exchanges have asked authorities for clearer standards for determining which foreign businesses should be treated as high risk.

Enforcement decisions under the same financial information law have already produced court challenges. In April, a Seoul court overturned a three-month partial suspension imposed on Dunamu, the operator of Upbit, after the FIU alleged 44,948 transactions involving 19 unregistered overseas platforms.

Bithumb separately secured a court stay against a six-month partial suspension after regulators accused it of customer verification failures and dealings with unregistered foreign companies. Coinone also obtained temporary court relief from enforcement measures connected to anti-money laundering and customer verification requirements.

Cross-border crypto transfers face separate registration rules

South Korea has also created another regulatory route for businesses moving digital assets across national borders.

Under amendments to the Foreign Exchange Transactions Act, companies handling cross-border virtual asset transfers will have to register with the Ministry of Economy and Finance when the framework takes effect in December.

A June licensing report detailed how authorities were preparing enforcement regulations that could allow eligible fintech companies, alongside crypto businesses, to provide blockchain-based cross-border remittance and foreign exchange services.

The South Korean government promulgated the revised law on June 2 with a six-month grace period. Once implemented, virtual asset transfers involving South Korea and another country will fall under the country’s regulated foreign exchange system.

Companies seeking to provide the service will need to register with the finance ministry and report qualifying overseas transfers through the Bank of Korea’s foreign exchange reporting network.

Authorities have said crypto transfers previously operating outside the formal foreign exchange reporting system created risks involving illicit foreign exchange transactions and money laundering.

Applicants under the new framework must first complete virtual asset service provider registration, connect their systems to institutions responsible for transmitting foreign exchange and digital asset transaction data, and satisfy additional requirements covering facilities and qualified personnel.

The Royal Government of Bhutan has moved 490.87 Bitcoin worth about $32.74 million to fresh wallets over the past 24 hours, extending a series of large BTC transfers from state-linked addresses in 2026.

According to blockchain analytics platform Onchain Lens, the latest activity included a 485 BTC transfer worth approximately $32.31 million, which accounted for nearly all of the Bitcoin moved during the period.

Smaller transactions made up the remaining amount, with Onchain Lens data showing BTC leaving wallets identified as belonging to the Royal Government of Bhutan. The analytics platform did not identify the fresh recipient wallets as exchanges or trading firms, and it did not confirm whether the transfers represented sales.

The distinction is important because a transfer to a newly created or unidentified wallet does not establish what happened to the Bitcoin afterward. Bhutan has previously moved BTC to unknown addresses as well as wallets connected to trading firms, making the eventual destination relevant when determining whether funds were sold or simply reorganized.

Bhutan Bitcoin transfers have continued through 2026

The latest movement came just days after another large transaction from Bhutan-linked addresses.

On Aug. 18, blockchain tracker Lookonchain reported that the Royal Government of Bhutan transferred 300 BTC worth about $19.28 million to a new wallet. The firm described the transaction as another sale, although the initial transfer itself went to a fresh address.

Earlier transactions have followed a similar pattern, with large amounts of Bitcoin leaving government-linked wallets before moving through other addresses.

By May, state-linked BTC outflows had already surpassed $230 million for 2026, according to Arkham Intelligence data previously covered by crypto.news.

The May transaction involved 100.44 BTC worth approximately $8.2 million moving to an unlabeled wallet. Arkham said at the time that Bhutan-linked addresses were averaging close to $50 million in monthly Bitcoin movements during 2026.

Some earlier transfers eventually reached Binance and Galaxy Digital, according to Arkham. However, the analytics firm noted that movements to unidentified addresses could not automatically be treated as confirmed sales.

Bhutan’s wallet activity accelerated during March. On March 25, a state-linked address moved another 519.7 BTC worth about $36.7 million to two wallets.

Onchain Lens identified one of the recipients as being linked to crypto trading firm QCP Capital. The transaction was the third major sovereign wallet movement recorded that month, following an approximately $72 million transfer and another $11.8 million movement earlier in March.

Bhutan’s BTC holdings have fallen from their 2024 peak

Repeated transfers have reduced the amount of Bitcoin visible in wallets identified by blockchain analytics firms as belonging to Bhutan or its sovereign investment arm, Druk Holding & Investments.

Arkham data showed Bhutan held more than 13,000 BTC at its peak in October 2024. By March 25, identified holdings had fallen to 4,453 BTC worth about $315 million at the time.

A few days earlier, Bhutan had transferred about $72.3 million in Bitcoin over a 24-hour period. More than 973 BTC moved across several transactions linked to DHI, which oversees the country’s mining and digital asset operations.

The March transactions followed smaller movements earlier in the year. Arkham data showed Bhutan-linked wallets moved more than 284 BTC worth roughly $22 million during one week in February, including transfers to addresses associated with QCP Capital.

By March 20, Arkham estimated that more than $110 million worth of Bitcoin had left Bhutan-linked holdings since the start of 2026. The analytics firm tracked transfers to counterparties including QCP Capital and Binance while also recording movements to unidentified wallets.

The numbers attached to Bhutan’s holdings can vary depending on which addresses blockchain analytics platforms identify as government-controlled. Transfers to a previously unknown address can also reduce the balance displayed under a government’s tagged portfolio even when ownership of the coins has not necessarily changed.

For that reason, the latest 490.87 BTC transaction establishes that the funds moved from addresses attributed to Bhutan, but the available Onchain Lens data does not establish whether the government sold the Bitcoin.

Hydropower mining built Bhutan’s Bitcoin position

Bhutan’s state Bitcoin holdings were largely accumulated through mining rather than purchases or asset seizures.

The Himalayan kingdom began developing state-backed Bitcoin mining operations years ago, using its hydroelectric power resources to operate mining facilities. DHI emerged as the main state entity overseeing the program.

Arkham first publicly identified Bhutan’s holdings in 2024, when it traced more than 13,000 BTC to government-linked mining operations. At the time, the position was worth more than $750 million and placed Bhutan among the largest known government Bitcoin holders.

The country’s mining infrastructure was also expanded through a partnership with Bitdeer Technologies. Plans announced in 2024 called for another 500 megawatts of mining capacity, taking the planned total to 600 MW.

Unlike sovereign Bitcoin positions created through law-enforcement seizures, Bhutan’s holdings therefore represented assets generated through mining operations backed by domestic energy infrastructure.

The government has since incorporated Bitcoin into plans extending beyond mining. In December 2025, Bhutan announced a Bitcoin Development Pledge tied to Gelephu Mindfulness City, a special administrative region being developed in southern Bhutan.

Under the strategy, the country pledged up to 10,000 BTC to support Gelephu’s long-term development, while outlining plans involving hydro-powered mining, long-term Bitcoin holdings and partnerships built around the city.

Gelephu has started putting its Bitcoin strategy into operation

Parts of the Gelephu strategy have moved into implementation during 2026.

On July 30, Gelephu Mindfulness City appointed digital asset manager 3iQ to oversee an undisclosed portion of its Bitcoin treasury.

The mandate covers professional management of BTC assigned to the city while 3iQ establishes a local presence and supports investment expertise and knowledge transfer. The exact amount of Bitcoin placed under the mandate was not disclosed.

The agreement followed the December 2025 pledge of up to 10,000 BTC for Gelephu’s development strategy.

Gelephu has also been building a regulatory structure for digital asset businesses. During May, the city introduced a fast-track licensing route for qualifying crypto companies already regulated in selected overseas jurisdictions.

The framework allows firms with licenses from approved markets to use existing regulatory records during the application process, although they remain subject to local oversight.

More recently, Bitget signed a cooperation agreement with the Gelephu Mindfulness City Authority to establish a local entity and pursue a Financial Services Licence. Under the agreement announced in August, the exchange plans to work with the city authority on regulatory, operational and ecosystem development while preparing its licensing application.