Key Takeaways:

• FSC and DAXA implemented unified rules after data showed 59% of fraud occurred via withdrawal exceptions.
• The stricter mandates are projected to slash withdrawal exception eligibility by more than 99%.
• FSS and DAXA will now conduct regular audits and annual fund verifications to prevent future smurfing.

Criminals Exploit Lax Exception Standards

South Korea’s financial regulators announced a major tightening of the “Virtual Asset Withdrawal Delay System” after discovering that lax exception standards were being exploited by voice phishing syndicates to launder criminal proceeds. The Financial Services Commission (FSC), the Financial Supervisory Service (FSS), and the Digital Asset Exchange Association (DAXA)…