In a significant crackdown on 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 counter the rapid rise of voice phishing scams that exploit swift transaction capabilities. The Financial Services Commission and the 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 sources. Historically, cryptocurrency platforms established their own rules for exceptions to maintain rapid trading.
However, fraud groups became adept at understanding these rules and would instruct their victims on how to circumvent them. Voice phishing scams typically coerce victims into converting their cash into cryptocurrency and transferring it within a short timeframe.
Even a brief delay can disrupt the scam by providing victims with time to reconsider or allowing alerts to emerge before the funds leave the account. Under the new system, exchanges are required to apply uniform criteria when evaluating withdrawal exceptions, including account history, transaction patterns, and sudden behavioral changes. Officials anticipate that less than 1% of users will be eligible for immediate withdrawals.
Additionally, platforms must enhance identity verification processes and closely monitor fund flows. This move signifies a transition from industry-driven safeguards to a nationwide standard. In contrast to other markets, such as the U.S. and Europe, where withdrawal holds are common but determined by individual companies, some exchanges even permit users to set their own timelocks to prevent unauthorized withdrawals.
The South Korean regulators did not immediately respond to requests for further commentary.