South Korean financial regulators have ordered all domestic crypto exchanges to adopt a single, strict system for delaying withdrawals, aiming to block a rise in speed-dependent voice phishing scams.
The Financial Services Commission and the Financial Supervisory Service announced the new rules, removing the discretion exchanges once had to allow users to bypass holding periods, local media reports.
In the past, platforms established their own exceptions to continue operating quickly. Fraud groups learned those rules and trained victims to circumvent them.
Voice phishing scams often push victims to convert cash into cryptocurrency and send it within minutes. A delay, even a brief one, can disrupt the scam by giving victims time to reconsider or allowing alerts to appear before funds leave the 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 that less than 1% of users will qualify for instant withdrawals. Platforms must also tighten identity checks and more closely monitor fund flows.
The move marks a shift from industry-led safeguards to a national standard.
In other markets, such as the United States and Europe, withdrawal suspensions are common, but are set by individual companies. Some exchanges even allow users to set their own time limits to prevent unwanted withdrawals.
South Korean regulators did not immediately respond to CoinDesk’s request for further comment.
