Fish is an excellent source for high-quality protein, good fat (omega 3 and 6), vitamin (B, D), and minerals (Ca, P, Zn, I, Mg, K, etc.) and can lower blood pressure and help reduce the risk of a heart attack or stroke. The illegal addition of formaldehyde (FA) to extend the shelf life is a common problem reported in many countries and the FA is classified as a group 1 human carcinogen by the International Agency for Research on Cancer (IARC). There is also the natural formation pathway of FA in fish and seafood. This article summarises the FA levels in fish and seafood (from 2000), formation pathways, health risk assessment, regulations, and analytical techniques to measure FA. It is shown that the reported FA levels are frequently higher than the recognised safety level of 5 mg/kg. This review highlights the requirement of a broad scale effort to measure the indigenous FA levels in fish and ensure that this can be differentiated by the illegal addition of FA. This will allow the strengthening of regulations and allow monitoring to detect and deter the practice of illegal addition of FA to fish and seafood.