Key Takeaways:
South Korea’s top financial regulators on April 8 ordered all domestic crypto exchanges to adopt a single, stringent withdrawal delay system, a move designed to choke off the rapid fund transfers used in voice phishing scams.
The new rules were announced by the Financial Services Commission and Financial Supervisory Service, according to local news reports. The mandate removes the discretion exchanges previously held to grant exceptions to withdrawal holding periods, creating a unified national standard.
Under the new system, officials expect fewer than 1% of users will qualify for instant withdrawals. Exchanges must now apply the same strict criteria when reviewing exceptions, including account history, transaction patterns, and sudden changes in behavior, while also tightening identity checks and monitoring fund flows more closely.
This policy shift from industry-led safeguards to a national standard aims to interrupt fraud by creating a crucial time gap, allowing victims to reconsider or for alerts to surface before funds are lost. The move contrasts with approaches in the U.S. and Europe, where withdrawal holds are common but set by individual firms.
Voice phishing scams have surged by exploiting the speed of crypto transactions, often coaching victims to convert cash to digital assets and transfer them out within minutes. Previously, fraud groups studied the unique exception rules at different South Korean exchanges and guided their victims to meet the criteria for rapid withdrawals. By standardizing the rules, regulators aim to close these loopholes.
The new system prioritizes security across the market, a departure from the previous environment where platforms competed on transaction speed. Some exchanges in other jurisdictions, such as those in Europe, even allow users to set their own security timelocks to prevent unauthorized withdrawals.
CoinDesk's request for further comment from the South Korean regulators was not immediately returned.
This article is for informational purposes only and does not constitute investment advice.
