In a significant move to combat voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a unified system for delaying withdrawals. This strict measure aims to counter the surge in scams that exploit the speed of transactions. The Financial Services Commission and Financial Supervisory Service have announced these new rules, effectively eliminating the discretion exchanges previously had to allow users to bypass holding periods, as reported by local news outlets. Historically, platforms had set their own rules for exceptions to maintain fast trading, which fraud groups had learned to circumvent by coaching victims on how to bypass these rules.
Voice phishing scams typically involve deceiving victims into converting cash to cryptocurrency and transferring it within minutes. Even a brief delay can disrupt such scams by giving victims time to reconsider or allowing alerts to be raised before funds are transferred out of an account. Under the new regulations, exchanges are required to apply uniform criteria when evaluating withdrawal exceptions, including account history, transaction patterns, and sudden behavioral changes. It is anticipated that less than 1% of users will qualify for immediate withdrawals.
Furthermore, platforms are obligated to enhance identity verification processes and closely monitor fund flows. This shift signifies a move from industry-led security measures to a nationally standardized approach.
Unlike some other markets, such as the U.S. and Europe, where withdrawal holds are common but determined by individual companies, South Korea is adopting a more centralized regulatory stance.
The regulatory bodies did not provide immediate comment on the matter.