In South Korea, financial authorities have made it mandatory for local cryptocurrency exchanges to implement a single and strict delay system for withdrawals. It was stated that this decision aims to prevent fast money transfer in cases of phone fraud that have increased recently. In the announcement made by the Financial Services Commission and the Financial Supervision Service, it was announced that the flexible withdrawal period practices offered by the stock exchanges to their users were abolished.
National regulation against phone fraud
Previously, cryptocurrency platforms could grant their customers the right to withdraw without waiting in exceptional cases to ensure fast transactions. However, it has been reported that fraudulent groups take advantage of these loopholes and instruct victims to bypass the rules of the exchanges. In most fraud cases, victims are asked to quickly convert their cash holdings into cryptocurrency and send it out of the exchange instantly; A delay in the shooting process can give time for victims to review their decisions or for possible warnings to reach the authorities.
With the new regulation, all cryptocurrency exchanges are required to apply uniform criteria in cases where they grant withdrawal exceptions. These criteria include account history, trading habits and abnormal behavioral changes. Authorities predict that the rate of users who will be able to withdraw money instantly will remain below 1 percent, thanks to this strict procedure. On the other hand, exchanges are expected to strengthen identity verification checks and monitor fund movements in more detail.
Transition from local practice to national standard
The step in question means a transition from the security measures determined by the crypto industry to date to standardization at the national level. Previously, exchanges could implement individual policies in line with special requests from their users and allow some users to withdraw quickly.
There are also delays regarding the withdrawal process in other major markets such as the USA and Europe, but these regulations may vary depending on the company. Some international exchanges may also offer users the option to impose time limits on withdrawal transactions at their discretion.
South Korean officials are of the opinion that this new obligation will be effective in the fight against fraud. It is also expected that the application will popularize higher security standards in the industry.
The Financial Services Commission and the Financial Supervisory Service are among the main institutions responsible for financial regulations in the country. Recently, they have been taking an active role in taking more comprehensive measures against risks in crypto asset markets.
In the latest statement made by the regulators, it was stated that the new withdrawal delay standard is binding for crypto exchanges. In this way, it is aimed to prevent application differences between platforms.
