In a significant crackdown on voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a uniform, 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, eliminating the discretion previously allowed to exchanges to permit users to bypass holding periods, as reported by local news sources. Historically, platforms had set their own rules for exceptions to maintain swift trading, which fraud groups had learned to circumvent by coaching victims on how to bypass these rules.
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 reconsider 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 sudden behavioral changes. Officials anticipate that less than 1% of users will qualify for immediate withdrawals. Additionally, platforms are required to enhance identity verification processes and closely monitor fund transfers.
This shift marks a transition from industry-driven safeguards to a standardized national approach. In contrast, markets like the U.S.
and Europe have common withdrawal holds, but these are set by individual companies. Some exchanges even allow users to set personal timelocks to prevent unauthorized withdrawals. The South Korean regulators have not immediately responded to requests for further commentary.