The new rules apply uniform criteria for withdrawal exceptions based on account history and transaction patterns.
What to know:
- South Korea’s financial regulators have ordered all domestic crypto exchanges to adopt a single withdrawal delay system to combat voice phishing scams.
- The new rules apply uniform criteria for withdrawal exceptions based on account history and transaction patterns.
- Fewer than 1% of users are expected to qualify for instant withdrawals, and exchanges must strengthen identity checks and monitoring.
South Korea’s financial regulators have ordered all domestic crypto exchanges to adopt a single, strict system for delaying withdrawals, aiming to block a surge in voice phishing scams that rely on speed.
The Financial Services Commission and Financial Supervisory Service announced the new rules, removing the discretion exchanges once had to let users bypass holding periods, local news outlets report.
In the past, platforms set their own exceptions to keep trading fast. Fraud groups learned those rules and coached victims to slip through them.
Voice phishing scams often push victims to convert cash into crypto and send it out within minutes. A delay, even a short one, can interrupt the scam by giving victims time to reconsider or allow alerts to surface before funds leave an account.
Under the new system, exchanges must apply the same criteria when reviewing withdrawal exceptions. These include account history, transaction patterns and sudden changes in behavior. Officials expect fewer than 1% of users will qualify for instant withdrawals. Platforms must also tighten identity checks and monitor fund flows more closely.
The move marks a shift from industry-led safeguards to a national standard.
In other markets such as the U.S. and Europe, withdrawal holds are common but set by individual firms. Some exchanges even let users set their own timelocks to prevent unwanted withdrawals.
The South Korean regulators did not immediately respond to CoinDesk’s request for further comment.