In a significant crackdown on voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a standardized system for delaying withdrawals. This move aims to thwart the growing number of scams that exploit the speed of transactions.
The Financial Services Commission and the Financial Supervisory Service have introduced these new rules, effectively removing the discretion that 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, which fraud groups would learn and use to coach their victims on how to bypass these rules quickly.
Voice phishing scams typically involve convincing victims to convert their money into cryptocurrency and transfer 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, all exchanges must apply uniform criteria when evaluating withdrawal exceptions, including account history, transaction patterns, and any sudden changes in behavior. It is expected that less than 1% of users will be eligible for immediate withdrawals. Additionally, exchanges are required to enhance identity verification processes and closely monitor the flow of funds.
This change represents a shift from industry-driven security measures to a nationwide standard. 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.
At the time of request, the South Korean regulators did not provide further comment to CoinDesk.