In a bid to tackle the rising incidence of voice phishing scams, South Korea's financial regulatory bodies have introduced a unified system for delaying withdrawals across all domestic cryptocurrency exchanges. This move eliminates the discretion previously held by exchanges to allow users to bypass holding periods, as reported by local news outlets. The Financial Services Commission and Financial Supervisory Service have announced these new rules, which aim to counter scams that exploit the speed of transactions. Previously, exchanges had set their own rules for exceptions, which fraud groups had learned to circumvent by coaching victims on how to bypass these safeguards.
Voice phishing scams typically involve convincing victims to quickly convert cash into cryptocurrency and transfer it within minutes. Implementing a delay, even if brief, can disrupt such scams by giving victims time to reflect 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 account history, transaction patterns, and sudden behavioral changes. It is anticipated that less than 1% of users will be eligible for instant withdrawals.
Furthermore, platforms are mandated to enhance identity verification processes and closely monitor fund flows. This development signifies a transition from industry-driven security measures to a standardized national approach. Unlike some other markets, such as the U.S. and Europe, where withdrawal holds are common but determined by individual companies, South Korea's regulatory bodies have taken a more centralized approach.
Some exchanges in other markets even allow users to set personal timelocks to prevent unauthorized withdrawals. The South Korean regulators have not provided additional comments on the matter at this time.