In a significant crackdown on phishing scams, South Korea's financial authorities have mandated that all domestic cryptocurrency exchanges implement a uniform, stringent system for delaying withdrawals. This move aims to counter the rising tide of voice phishing scams that exploit the speed of transactions. Previously, exchanges had the discretion to allow users to bypass holding periods, but this has been removed in favor of a standardized approach. The new rules, announced by the Financial Services Commission and Financial Supervisory Service, require exchanges to apply consistent criteria when assessing withdrawal exceptions, including account history, transaction patterns, and abrupt changes in user behavior.
It is anticipated that less than 1% of users will be eligible for immediate withdrawals under the new system. Additionally, exchanges are required to enhance identity verification processes and closely monitor fund transfers.
This shift towards a nationally standardized approach differs from the industry-led safeguards commonly seen in markets like the U.S. and Europe, where withdrawal holds are typically set by individual firms. Some exchanges in these markets even allow users to set their own timelocks to prevent unauthorized withdrawals. The South Korean regulators have not provided further comment on the matter at this time.