In a significant move to combat voice phishing scams, South Korea's financial regulatory bodies have mandated that all domestic cryptocurrency exchanges implement a standardized system for delaying withdrawals. This measure aims to counter the increasing incidence of scams that exploit the speed of transactions. The Financial Services Commission and Financial Supervisory Service have introduced these new rules, thereby eliminating the discretionary powers previously held by exchanges to allow users to bypass holding periods, as reported by local news sources.
Historically, platforms had set their own rules for exceptions to maintain swift trading. However, fraudsters had learned to exploit these rules, coaching their victims on how to bypass them. Voice phishing scams typically involve deceiving victims into converting their cash into cryptocurrency and transferring it within a short timeframe.
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 system, exchanges are required to apply uniform criteria when evaluating withdrawal exceptions, including factors such as account history, transaction patterns, and sudden behavioral changes.
It is anticipated that less than 1% of users will be eligible for immediate withdrawals. Additionally, platforms must enhance identity verification processes and closely monitor fund flows. This development marks a transition from industry-driven safeguards to a nationally standardized approach. In contrast, other markets like the U.S.
and Europe have withdrawal holds in place, but these are determined by individual companies. Some exchanges even allow users to set their own timelocks to prevent unauthorized withdrawals. The South Korean regulators have not yet responded to requests for further commentary.