In a significant crackdown on phishing scams, South Korea's financial regulatory bodies have mandated that all local cryptocurrency exchanges implement a standardized system for delaying withdrawals, aiming to thwart the rapid execution of voice phishing attacks. According to local news sources, the Financial Services Commission and Financial Supervisory Service have introduced these new rules, eliminating the flexibility exchanges previously had to allow users to bypass holding periods. Historically, platforms had set their own rules for exceptions to maintain swift trading, which fraudsters exploited by coaching victims on how to bypass these exceptions.
Voice phishing scams typically coerce victims into converting cash to cryptocurrency and transferring it within minutes. Even brief delays can disrupt these scams, providing victims with time to reconsider or allowing alerts to emerge before funds are transferred out of an account.
Under the new regulations, exchanges are required to apply uniform criteria when reviewing exceptions to withdrawal holds, including account history, transaction patterns, and abrupt changes in behavior. Authorities anticipate that less than 1% of users will be eligible for instant withdrawals.
Additionally, platforms must enhance identity verification and closely monitor fund movements. This move signifies a transition from industry-driven safeguards to a nationwide standard.
In contrast to other markets like the U.S. and Europe, where withdrawal holds are common but determined by individual companies, some exchanges even allow users to set personal timelocks to prevent unwanted withdrawals.
South Korean regulators have not yet responded to requests for further comment.