In a significant crackdown on phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a uniform system for delaying withdrawals. The move aims to prevent fraudsters from exploiting the speed of transactions to deceive victims. Previously, exchanges had the discretion to set their own rules for exceptions to holding periods, which fraud groups would then exploit. The new rules, announced by the Financial Services Commission and Financial Supervisory Service, will apply consistent criteria to review withdrawal exceptions, including account history, transaction patterns, and unusual changes in behavior.
This is expected to reduce the number of users eligible for instant withdrawals to less than 1%. Additionally, exchanges must strengthen identity verification processes and closely monitor fund flows.
The introduction of these national standards marks a shift away from industry-led safeguards, differing from practices in other markets such as the U.S. and Europe, where withdrawal holds are set by individual companies or even customizable by users.