In a significant move to combat the rising tide of voice phishing scams, South Korea's financial regulatory bodies have introduced a unified system for crypto exchanges to manage withdrawal delays, thereby curbing the scams' reliance on rapid transactions. The Financial Services Commission and Financial Supervisory Service have announced these new rules, which eliminate the discretion exchanges previously had to allow users to bypass holding periods, as reported by local news outlets.
Historically, platforms had set their own rules for exceptions to maintain swift trading, but fraudsters had learned to exploit these rules, coaching victims on how to bypass them. Voice phishing scams typically involve urging victims to quickly convert cash into cryptocurrency and transfer it within minutes.
Even brief delays 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 system, exchanges are required to apply uniform criteria for reviewing withdrawal exceptions, including account history, transaction patterns, and abrupt changes in behavior. Officials anticipate that less than 1% of users will qualify for immediate withdrawals. Additionally, platforms must enhance identity verification and closely monitor fund flows.
This development signifies a transition from industry-driven security measures to a nationwide standard. In contrast, other 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 their own timelocks to prevent unauthorized withdrawals.
The South Korean regulators did not immediately respond to requests for further comment.