South Korea’s monetary regulator stated it should tighten the exception guidelines below crypto exchanges’ withdrawal-delay system after discovering that scam-linked accounts granted exemptions accounted for many voice-phishing-related losses.
The Monetary Providers Fee (FSC) stated Wednesday that the strengthened framework, developed with the Monetary Supervisory Service (FSS) and the Digital Asset eXchange Alliance (DAXA), will impose unified requirements on when customers can bypass withdrawal delays.
The regulator stated exchanges had been making use of their very own exception standards with no clear minimal commonplace, creating loopholes that permit unhealthy actors rapidly transfer funds in the event that they meet simple necessities corresponding to account age or buying and selling historical past.
From June to September 2025, accounts granted withdrawal-delay exemptions made up 59% of fraudulent accounts and 75.5% of associated losses at crypto exchanges, the FSC stated.
The transfer follows a wider South Korean push to tighten crypto trade controls after voice-phishing abuse and operational-control failures, together with recent reforms introduced this week after Bithumb’s Bitcoin (BTC) payout error.
Unified guidelines intention to curb misuse of withdrawal-delay exemptions
The FSC stated that below the brand new guidelines, exchanges should assess elements like buying and selling frequency, account historical past and deposit and withdrawal quantities when figuring out whether or not a consumer qualifies for a withdrawal-delay exemption.
The regulator stated the change is anticipated to cut back the variety of customers eligible for exemptions sharply. The FSC stated a simulation confirmed the share of customers eligible for exemptions would fall to round 1% below the brand new guidelines, however didn’t present a baseline for comparability.
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The FSC stated it should additionally strengthen oversight of customers granted exemptions by means of periodic checks, together with verification of the supply of funds, and by constructing techniques to watch suspicious withdrawal exercise.
The regulator added that they are going to proceed reviewing the principles to stop new circumvention strategies and alter as wanted.
The transfer provides to a broader push by South Korean regulators to tighten oversight of crypto exchanges following latest incidents.
On Tuesday, the FSC ordered exchanges to reconcile inside ledgers with precise asset holdings each 5 minutes after an inspection linked to the Bithumb payout error discovered gaps in inside controls and threat administration techniques.
On Jan. 29, South Korea expanded crypto licensing scrutiny to cowl exchanges and main shareholders.
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