South Korea's financial regulators have mandated a single, strict system for delaying cryptocurrency withdrawals across all domestic exchanges. This move aims to combat a significant increase in voice phishing scams that exploit rapid fund transfers.
The Financial Services Commission and Financial Supervisory Service have removed the discretion exchanges previously held to allow users to bypass withdrawal holding periods. Previously, platforms set their own exceptions to facilitate trading speed, a loophole exploited by fraud groups. Voice phishing scams often pressure victims into converting cash to crypto and sending funds within minutes.
The new system requires exchanges to apply uniform criteria for withdrawal exceptions, including account history, transaction patterns, and sudden behavioral changes. Officials anticipate fewer than 1% of users will qualify for instant withdrawals. Exchanges must also enhance identity checks and monitor fund flows more closely.
This policy shift establishes a national standard, moving away from industry-led safeguards. Unlike in some other markets where withdrawal holds are set by individual firms, South Korea is implementing a centralized approach.