In a significant move to combat voice phishing scams, South Korea's financial regulatory bodies have introduced a unified system for delaying withdrawals across all domestic cryptocurrency exchanges. The new rules eliminate the discretion previously held by exchanges to allow users to bypass holding periods, instead implementing a strict, uniform criteria for reviewing withdrawal exceptions.
This criteria includes account history, transaction patterns, and sudden changes in behavior, with the expectation that less than 1% of users will be eligible for instant withdrawals. The move is anticipated to disrupt the operations of fraud groups that rely on speed to execute voice phishing scams, which often involve convincing victims to rapidly convert cash into cryptocurrency and transfer it out of their accounts.
By introducing a short delay, even if only brief, victims may be given the opportunity to reconsider or allow alerts to surface before funds are transferred out of their accounts. This shift towards a national standard marks a departure from the previously industry-led approach to safeguards, with exchanges now required to tighten identity checks and closely monitor fund flows.
In contrast to other markets, such as the U.S. and Europe, where withdrawal holds are common but set by individual firms, South Korea's regulators have established a standardized framework to prevent phishing scams.