In a significant move to combat voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a uniform, stringent system for managing withdrawal delays. This initiative aims to counter the rising tide of phishing scams that capitalize on swift transaction processing.
The Financial Services Commission and Financial Supervisory Service have introduced these new rules, effectively eliminating the discretion previously held by exchanges to waive holding periods for withdrawals, as reported by local news sources. Historically, cryptocurrency platforms had their own rules for exceptions, allowing for faster trading.
However, fraudsters exploited these rules, instructing their victims on how to bypass them. Voice phishing scams typically coerce victims into converting their money into cryptocurrency and transferring it out within a short timeframe.
Even brief delays can disrupt these scams by giving victims time to reconsider or allowing alerts to be raised before funds are transferred out of an account. Under the new regulations, exchanges are required to apply uniform criteria when evaluating withdrawal exceptions, including factors such as account history, transaction patterns, and abrupt changes in user behavior. It is anticipated that less than 1% of users will be eligible for immediate withdrawals.
Furthermore, platforms are obligated 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 offer users the option to set their own timelocks to prevent unauthorized withdrawals. The South Korean regulatory authorities did not provide immediate comment on the matter when contacted by CoinDesk.