In a significant move to combat voice phishing scams, South Korea's financial regulatory bodies have instructed all local cryptocurrency exchanges to implement a unified, stringent system for withdrawal delays. This initiative aims to counter the rising incidence of scams that exploit the speed of transactions. The Financial Services Commission and the Financial Supervisory Service have announced these new rules, effectively ending the discretion exchanges previously had in allowing users to bypass holding periods, as reported by local news sources.
Historically, exchanges had set their own rules for exceptions to maintain swift trading, which fraudsters learned to circumvent by coaching victims on how to bypass these safeguards. Voice phishing scams typically coerce victims into converting cash to cryptocurrency and transferring it within minutes. Even a brief delay can disrupt such scams by giving victims time to reflect or allowing alerts to emerge before funds are transferred out of an account. Under the new regulations, exchanges are required to apply uniform criteria when evaluating withdrawal exceptions, including account history, transaction patterns, and abrupt behavioral changes.
It is anticipated that less than 1% of users will qualify for immediate withdrawals under these new standards. Furthermore, platforms are mandated to enhance identity verification processes and monitor fund movements more rigorously.
This shift signifies a transition from self-regulatory measures within the industry to a nationally standardized approach. In contrast, other markets like the U.S.
and Europe have withdrawal holds that are set by individual companies, with some exchanges even offering users the option to set personal timelocks to prevent unauthorized withdrawals. The South Korean regulatory authorities did not provide immediate comment on the matter when approached by CoinDesk.