In a significant move to combat voice phishing scams, South Korea's financial authorities have introduced a unified system for crypto exchanges to manage withdrawal delays, eliminating the previous discretion allowed to exchanges. The new rules, announced by the Financial Services Commission and Financial Supervisory Service, require all domestic crypto exchanges to adopt a standardized system for handling withdrawal exceptions, based on uniform criteria including account history, transaction patterns, and unusual behavioral changes.
This shift from self-regulation to a national standard aims to prevent fraudsters from exploiting variations in exchange policies to carry out voice phishing scams, which often rely on rapid transactions. By introducing a consistent delay, even if brief, the new system seeks to provide victims with a window of opportunity to reconsider or allow for alerts to be triggered before funds are transferred out of an account. Under the new regulations, fewer than 1% of users are expected to be eligible for instant withdrawals, and exchanges are also mandated to enhance identity verification processes and closely monitor fund movements.
This development marks a notable departure from the industry-led approaches commonly seen in other markets, such as the U.S. and Europe, where withdrawal holds are typically determined by individual companies.