In a significant crackdown on voice 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 surge in scams that exploit the speed of transactions.
The Financial Services Commission and Financial Supervisory Service have introduced these new rules, thereby eliminating the discretion exchanges previously had to allow users to bypass holding periods, as reported by local news sources. Previously, each platform had its own set of rules for exceptions to facilitate faster trading, which fraudsters would learn and use to coach their victims on how to bypass these rules. Voice phishing scams typically involve deceiving victims into converting their cash into cryptocurrency and transferring it within a short time frame.
Even a brief delay can disrupt the scam by giving the victim time to reconsider or allowing alerts to be raised before the funds are transferred out of 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. It is anticipated that less than 1% of users will be eligible for instant withdrawals.
Additionally, platforms are required to enhance identity verification and closely monitor fund flows. This marks a transition from industry-driven security measures to a standardized national approach. In contrast to other markets like the U.S.
and Europe, where withdrawal holds are common but set by individual companies, some exchanges even allow users to set their own timelocks to prevent unauthorized withdrawals. The South Korean regulators have not provided further comment on the matter at this time.