In a significant move to combat the rising tide of voice phishing scams, South Korea's financial regulatory bodies have mandated that all local cryptocurrency exchanges implement a unified, stringent system for delaying withdrawals. This initiative aims to thwart scams that exploit the speed of transactions. The Financial Services Commission and the Financial Supervisory Service have announced these new rules, effectively eliminating the discretion exchanges previously had to allow users to bypass holding periods, as reported by local news sources.
Historically, platforms established their own rules for exceptions to maintain swift trading, which fraud groups exploited by instructing victims on how to navigate these loopholes. Voice phishing scams typically involve coercing victims into converting money into cryptocurrency and transferring it quickly.
Even a brief delay can disrupt such scams by providing victims with time to reconsider or allowing alerts to be raised before funds are transferred out of an account. Under the new framework, exchanges are required to apply uniform criteria for reviewing withdrawal exceptions, including factors such as account history, transaction patterns, and abrupt changes in behavior. It is anticipated that less than 1% of users will be eligible for immediate withdrawals. Additionally, platforms are obligated to enhance identity verification processes and closely monitor fund flows.
This development signifies a transition from industry-driven safeguards to a nationwide standard. In contrast, markets like the U.S. and Europe have withdrawal holds in place, but these are determined by individual companies.
Some exchanges even offer users the option to set personal timelocks to prevent unauthorized withdrawals. The South Korean regulators have not yet responded to requests for further commentary.