In a significant crackdown on voice phishing scams, South Korea's financial regulatory bodies have mandated that all local cryptocurrency exchanges implement a unified, stringent system for delaying withdrawals. This move aims to combat the surge in scams that exploit swift transaction capabilities. Previously, exchanges had the discretion to allow users to bypass holding periods, but this has been revoked.
The new rules, announced by the Financial Services Commission and Financial Supervisory Service, require exchanges to apply consistent criteria when evaluating withdrawal exceptions. These criteria include account history, transaction patterns, and abrupt changes in user behavior. It is anticipated that less than 1% of users will be eligible for immediate withdrawals under the new system. Additionally, exchanges are required to enhance identity verification processes and closely monitor fund transfers.
This shift towards a national standard marks a departure from the previous industry-led approach to security measures. In contrast to other markets, such as the U.S. and Europe, where withdrawal holds are common but determined by individual companies, South Korea's regulatory bodies have taken a more centralized approach. Some international exchanges even permit users to set personal timelocks to prevent unauthorized withdrawals.
The regulatory bodies did not provide immediate comment on the new rules.