In a bid to combat the rising tide of voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a unified, stringent system for delaying withdrawals. This move aims to thwart scammers who exploit the speed of transactions to deceive victims.
Previously, exchanges had the discretion to set their own rules for exceptions to holding periods, which fraudsters would study and manipulate to their advantage. The new rules, announced by the Financial Services Commission and Financial Supervisory Service, eliminate this discretion and require exchanges to apply uniform criteria, including account history, transaction patterns, and sudden behavioral changes, when reviewing withdrawal exceptions.
As a result, less than 1% of users are expected to qualify for instant withdrawals. Additionally, exchanges must enhance identity verification and closely monitor fund flows.
This shift from industry-led security measures to a national standard differs from the approach in markets like the U.S. and Europe, where withdrawal holds are typically set by individual firms. Some exchanges in these markets even allow users to set personal timelocks to prevent unauthorized withdrawals.
The South Korean regulators have not provided further comment on the new regulations at this time.