In a significant move to combat voice phishing scams, South Korea's financial regulatory bodies have introduced a unified system for crypto exchanges to handle withdrawal requests, eliminating the previously exercised discretion by exchanges to expedite withdrawals. The new regulations, announced by the Financial Services Commission and Financial Supervisory Service, mandate that all domestic crypto exchanges adhere to a strict set of criteria when assessing withdrawal exceptions, including account history, transaction patterns, and any sudden changes in user behavior. This standardization is aimed at thwarting phishing scams that exploit the speed of transactions. Typically, these scams coerce victims into rapidly converting cash to cryptocurrency and transferring it, a process that can be interrupted by even brief delays, allowing potential victims time to reconsider or for alerts to be raised before funds are transferred.
Under the new rules, less than 1% of users are expected to qualify for immediate withdrawals, and exchanges are also required to enhance identity verification processes and closely monitor fund movements. This shift towards a national standard diverges from the industry-led security measures seen in other markets like the U.S.
and Europe, where withdrawal holds are common but determined by individual companies, with some even offering users the option to set personal timelocks to prevent unauthorized withdrawals.