In a significant crackdown on phishing scams, South Korea's financial authorities have mandated that all domestic cryptocurrency exchanges implement a unified, stringent system for delaying withdrawals. This move aims to thwart the growing number of voice phishing scams that exploit the speed of transactions. The Financial Services Commission and Financial Supervisory Service have introduced these rules, eliminating the discretion that exchanges previously had to allow users to bypass holding periods, as reported by local news sources. Previously, exchanges had set their own rules for exceptions to maintain swift trading, but fraudsters adapted to these rules, instructing victims on how to bypass them.
Voice phishing scams typically coerce victims into converting cash to cryptocurrency and transferring it within minutes. Even a brief delay can disrupt the scam by giving victims time to reconsider or allowing alerts to emerge before funds are withdrawn.
Under the new system, exchanges must apply uniform criteria for reviewing withdrawal exceptions, including account history, transaction patterns, and abrupt behavioral changes. Officials anticipate 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 shift marks a transition from industry-driven safeguards to a nationwide standard.
In contrast, other markets like the U.S. and Europe have withdrawal holds in place, but these are set by individual companies, with some exchanges even allowing users to set their own timelocks to prevent unauthorized withdrawals. The South Korean regulators have not yet responded to requests for further comment.