Park Han-sol reports on Korea's financial regulators, along with fintech and insurance. She previously wrote about the art world, from biennales and exhibitions to fairs and auctions, with a focus on Seoul and the figures shaping the scene. Before joining The Korea Times, she spent a year at ABC News' Seoul bureau, contributing to coverage of major Asia-Pacific events.
Regulators tighten crypto exchanges' withdrawal rules to curb scams
The prices of cryptocurrencies are displayed on a screen inside the lounge of Bithumb, Korea's second-largest cryptocurrency exchange, in southern Seoul, March 4. Yonhap
By Park Han-sol
Financial regulators said Wednesday they will close loopholes in how cryptocurrency exchanges handle withdrawal delays by introducing a unified set of exemption rules across the industry.
The measure is aimed at preventing criminals, such as voice phishing and scammers, from quickly cashing out stolen funds. In many cases, illicit money is first deposited into an account, converted into cryptocurrency and then withdrawn before it can be traced or frozen.
Since May 2025, authorities have required exchanges to delay crypto withdrawals for 24 to 72 hours after a deposit. The idea is to create a buffer period that gives financial institutions time to detect and block suspicious transactions.
There are exemptions to the rule, based on factors such as how long an account has been active, its transaction history, trading volume and any record of financial misconduct. However, until now, each exchange applied its own criteria.
That inconsistency created loopholes. In some cases, accounts could qualify for exemptions relatively easily, allowing scammers to bypass the delay and withdraw funds almost immediately. Of the 2,526 fraudulent accounts identified at crypto exchanges between June and September last year, 59 percent fell into this exempt category.
To address this, the Financial Services Commission (FSC) has introduced standardized guidelines that tighten and align exemption criteria across all exchanges.
Regulators also plan to step up oversight of exempted accounts. This will include enhanced customer checks, such as verifying the source of funds, conducted on a regular basis, at least once a year. A new monitoring system will also be introduced to track and analyze withdrawal activity more systematically.
The FSC also said legitimate users will not be unduly affected. Exceptions will still be granted when immediate withdrawals are necessary for valid reasons, such as account settlements, to minimize inconvenience.