In a bid to counter a rise in voice phishing scams, South Korea's financial regulatory bodies have introduced a unified system for delaying cryptocurrency withdrawals. The new rules, announced by the Financial Services Commission and Financial Supervisory Service, eliminate the discretion previously held by exchanges to set their own criteria for bypassing holding periods, as reported by local news outlets. Previously, exchanges had set their own rules for exceptions, which fraud groups exploited by coaching victims on how to bypass these rules. Voice phishing scams typically involve convincing victims to quickly convert cash into cryptocurrency and transfer it within minutes.
Implementing a delay, even a brief one, can disrupt the scam by providing victims with time to reconsider or allowing alerts to be triggered before funds are withdrawn. Under the new system, exchanges are required to apply uniform criteria when evaluating withdrawal exceptions, including account history, transaction patterns, and sudden changes in behavior. Officials anticipate that fewer than 1% of users will be eligible for instant withdrawals.
Additionally, platforms are mandated to enhance identity verification processes and closely monitor fund transfers. This move signifies a transition from industry-driven safeguards to a standardized national approach. In contrast, other markets such as the US and Europe have withdrawal holds in place, but these are set by individual companies. Some exchanges even permit users to set their own timelocks to prevent unauthorized withdrawals.
The South Korean regulators did not immediately respond to requests for further comment.