In a significant move to combat voice phishing scams, South Korea's financial regulatory bodies have mandated that all local cryptocurrency exchanges implement a uniform, stringent system for handling withdrawal delays. This measure aims to counter the rising incidence of scams that exploit swift transaction capabilities. The Financial Services Commission and Financial Supervisory Service have announced these new rules, effectively eliminating the discretion previously held by exchanges to waive holding periods for users, as reported by local news sources. Previously, crypto platforms had established their own guidelines for exceptions, allowing for faster trading.
However, fraudsters adapted to these rules and instructed their victims on how to bypass them. Voice phishing scams typically coerce victims into converting cash to cryptocurrency and transferring it within a short timeframe. Even brief delays can disrupt these scams by providing victims with time to reconsider or allowing alerts to be triggered before funds are withdrawn from an account. Under the new framework, exchanges are required to apply uniform criteria when assessing withdrawal exceptions, including factors such as 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. Additionally, platforms must enhance identity verification processes and closely monitor fund movements.
This development marks a transition from industry-driven security measures to a standardized national approach. In contrast, other markets like the U.S. and Europe have withdrawal holds in place, but these are typically set by individual companies.
Some exchanges even offer users the option to set personal timelocks to prevent unauthorized withdrawals. The South Korean regulatory authorities did not provide immediate comment on the matter in response to CoinDesk's inquiry.