In a bid to curb the rising incidence of voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a unified, stringent system for delaying withdrawals. This move aims to thwart scammers who rely on swift transactions to deceive victims.
Previously, exchanges had the discretion to set their own rules for exceptions to holding periods, which fraudsters exploited by coaching victims on how to bypass these rules. The new rules, announced by the Financial Services Commission and Financial Supervisory Service, remove this discretion and require exchanges to apply uniform criteria when reviewing withdrawal exceptions.
These criteria include account history, transaction patterns, and unusual changes in behavior. As a result, fewer than 1% of users are expected to be eligible for instant withdrawals.
Additionally, exchanges must enhance identity verification processes and closely monitor fund transfers. This shift from industry-led security measures to a nationwide standard is a significant development in the fight against phishing scams. Unlike other markets, such as the US and Europe, where withdrawal holds are common but determined by individual companies, South Korea's regulators have established a standardized approach to preventing these scams.