The Financial Services Commission said inconsistent exemption rules created loopholes that allowed funds to move quickly with minimal account history.
South Korea’s financial regulator said it will tighten the exception rules under crypto exchanges’ withdrawal-delay system after finding that scam-linked accounts granted exemptions accounted for most voice-phishing-related losses.
The Financial Services Commission (FSC) said Wednesday that the strengthened framework, developed with the Financial Supervisory Service (FSS) and the Digital Asset eXchange Alliance (DAXA), will impose unified standards on when users can bypass withdrawal delays.
The regulator said exchanges had been applying their own exception criteria with no clear minimum standard, creating loopholes that let bad actors quickly move funds if they meet easy requirements such as account age or trading history.
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