In a significant crackdown on phishing scams, South Korea's financial regulatory bodies have mandated that all local cryptocurrency exchanges implement a unified, stringent system for delaying withdrawals. This move aims to thwart the rising incidence of voice phishing scams, which exploit the speed of transactions. According to local news reports, the Financial Services Commission and Financial Supervisory Service have introduced these new rules, thereby eliminating the discretion exchanges previously had to allow users to bypass holding periods. Historically, cryptocurrency platforms had set their own rules for exceptions to maintain rapid trading, but fraudsters adapted to these rules, coaching their victims on how to bypass them.
Voice phishing scams typically involve convincing victims to quickly convert cash into cryptocurrency and transfer it within minutes. Even a brief delay can disrupt such scams by giving victims time to reconsider or allowing alerts to be raised before funds are transferred out of an account. Under the new regulations, exchanges are required to apply uniform criteria when evaluating withdrawal exceptions, including account history, transaction patterns, and sudden behavioral changes.
It is anticipated that less than 1% of users will qualify for immediate withdrawals. Additionally, platforms must enhance identity verification processes and closely monitor fund movements. This shift reflects a move from industry-driven safeguards to a standardized national 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 permit 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.