South Korean financial regulators have ordered all domestic crypto exchanges to adopt a single, strict system for delaying withdrawals, in a bid to block a surge in voice phishing scams that rely on speed.
The Financial Services Commission and the Financial Supervisory Service announced the new rules, removing the discretion that exchanges once had to allow users to bypass holding periods, local media reported.
In the past, platforms set their own exceptions to maintain the speed of exchanges. Fraudulent groups learned these rules and helped their victims follow them.
Voice phishing scams often trick victims into converting money to crypto and sending it within minutes. Even a short delay can interrupt the scam by giving victims time to reconsider their decision or allowing alerts to surface before the funds leave their account.
Under the new system, exchanges must apply the same criteria when considering withdrawal exceptions. These include account history, transaction patterns, and sudden changes in behavior. Officials expect less than 1% of users to be eligible for instant withdrawals. Platforms must also strengthen identity controls and more closely monitor the flow of funds.
The move marks a shift from industry-led protection measures to a national standard.
In other markets, such as the United States and Europe, withdrawal holds are common but 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.
