South Korea has moved to tighten oversight of cryptocurrency withdrawals as regulators seek to curb voice phishing fraud and related money laundering. The Financial Services Commission (FSC), the Financial Supervisory Service (FSS), and the Digital Asset Exchange Association (DAXA) have rolled out unified and stricter standards for withdrawal delay exemptions, targeting inconsistencies that previously existed across exchanges.
Exemptions Became a Major Fraud Channel
According to the authorities, criminals exploited uneven exemption policies to move illicit funds quickly. Data showed that 59% of fraud cases were linked to withdrawal exceptions. Between June and September 2025, regulators identified 2,526 fraudulent accounts, of which 1,490 had been exempted from withdrawal delays, causing around $124 million in losses. The figures highlighted how exception policies, originally designed for convenience, had become a key escape route for bad actors.
Unified Rules Sharply Narrow Eligibility
Under the revised framework, crypto exchanges in South Korea must apply more rigorous and standardized screening criteria before granting any exemption. The review will consider factors such as transaction frequency and account age. In certain cases, no exceptions will be permitted at all, closing loopholes that had been repeatedly abused under the previous exchange-by-exchange approach.
Officials project that by the end of 2025, the number of customers eligible for withdrawal delay exemptions will fall by more than 99%. The policy marks a clear shift toward preventive controls, aiming to stop suspicious fund movements before losses escalate.
Tracking and Audits to Back Enforcement
Alongside the tighter rules, the FSC plans to implement a withdrawal tracking system to monitor transaction data and flag suspicious activity. The FSS and DAXA will also conduct regular audits to ensure exchanges are complying with the new standards, while penalties will apply to firms that fail to do so.
At the same time, the measures are not intended to block all legitimate user activity. Immediate withdrawals will still be allowed for non-criminal transactions. Overall, the new framework reflects South Korea’s effort to balance user access with stronger anti-fraud protections and reduce the misuse of crypto platforms for financial crime.