In a bid to combat the rising tide of voice phishing scams, South Korea's financial regulatory bodies have mandated the implementation of a unified, stringent system for delaying withdrawals across all domestic cryptocurrency exchanges. This move aims to thwart scams that exploit the speed of transactions. Previously, exchanges had the discretion to allow users to bypass holding periods, but this flexibility has been removed. The new rules, announced by the Financial Services Commission and Financial Supervisory Service, require exchanges to apply consistent criteria when evaluating withdrawal exceptions, including account history, transaction patterns, and unusual behavioral changes.
This standardized approach is expected to reduce the number of users eligible for immediate withdrawals to less than 1%. Furthermore, exchanges are required to enhance identity verification processes and closely monitor fund movements. This shift towards a nationally standardized safeguard marks a departure from the previously industry-led measures. In contrast to other markets like the U.S.
and Europe, where withdrawal holds are common but set by individual companies, South Korea's approach centralizes the regulation of withdrawal protocols. The regulatory bodies' decision reflects a proactive stance against phishing scams, which often deceive victims into rapidly converting cash to cryptocurrency and transferring it out of their accounts. By introducing even brief delays, the new system can provide victims with a window of opportunity to reconsider or allow for alerts to be raised before funds are transferred out of an account.