South Korea Strengthens Crypto Withdrawal Rules to Prevent Fraud

The South Korean government has introduced a revised virtual asset withdrawal delay system in an effort to combat cryptocurrency-related crimes.

Under the new rules, exchanges can no longer set their own standards for granting exceptions, which previously allowed users to skip withdrawal delays with minimal requirements. To qualify for immediate withdrawals, users must now pass a strict evaluation that includes factors such as transaction frequency, period, and deposit/withdrawal amounts.

The authorities have also introduced 'non-exception' requirements to prevent loopholes in the system. According to official data, 59% of fraudulent activities between June and September last year occurred in accounts exempt from withdrawal delays, resulting in a total loss of 170.5 billion won.

Exchanges are now required to conduct enhanced customer verification procedures at least once a year on accounts that qualify for exceptions, including checking the source of funds. A separate monitoring system will also be established to collect and analyze data on virtual asset withdrawals and detect abnormal transactions.