In a significant effort to combat voice phishing scams, South Korea's financial regulatory bodies have mandated that all local cryptocurrency exchanges implement a uniform, stringent system for delaying withdrawals. The goal is to thwart the rapid execution of phishing attacks that rely on swift transaction processing. The Financial Services Commission and the Financial Supervisory Service have introduced these new rules, effectively eliminating the discretion previously held by exchanges to allow users to bypass mandatory holding periods, as reported by local news sources.
Historically, cryptocurrency platforms had set their own rules for exceptions to maintain fast transaction processing. However, fraudsters learned to exploit these rules, coaching their victims on how to circumvent them.
Voice phishing scams typically coerce victims into converting their money into cryptocurrency and transferring it within a short timeframe. Even a brief delay can disrupt the scam by providing victims with time to reconsider or allowing alerts to be raised before the funds are withdrawn from the account. Under the new guidelines, exchanges are required to apply the same criteria when evaluating withdrawal exceptions.
These criteria include account history, transaction patterns, and sudden behavioral changes. Officials anticipate that less than 1% of users will be eligible for immediate withdrawals. Additionally, platforms must enhance identity verification processes and closely monitor fund movements. This move signifies a transition from industry-driven security measures to a standardized national approach.
In contrast, markets like the U.S. and Europe commonly 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 regulatory authorities did not immediately respond to requests for further commentary.