In a significant effort to combat voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a unified and stringent system for delaying withdrawals. This move aims to counter the rapid surge in phishing scams that exploit the speed of transactions. The Financial Services Commission and Financial Supervisory Service have introduced these new rules, effectively removing the flexibility 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 swift trading, but fraudsters have learned to exploit these exceptions, coaching victims on how to bypass them.
Voice phishing scams typically coerce victims into converting money into cryptocurrency and transferring it within minutes. Implementing 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 framework, 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 are required to enhance identity verification processes and closely monitor fund movements. This development signifies a transition from industry-driven security measures to a nationally standardized approach.
In contrast, markets like the U.S. and Europe have withdrawal holds in place, but these are determined by individual companies.
Some exchanges even allow users to set their own time locks to prevent unauthorized withdrawals. The South Korean regulators have not yet responded to requests for further commentary.