Beginning in October, victims of voice phishing in South Korea will be able to receive refunds for virtual assets that have been stolen from them. This legislative change comes as the National Assembly passed an amendment to the Telecommunications Financial Fraud Prevention and Compensation Act on the 12th, mandating that virtual asset exchanges must implement fraud prevention measures similar to those required of banks and securities firms. The new law aims to enhance protections for individuals who are targeted by voice phishing scams, particularly in the burgeoning area of digital assets.

Currently, financial institutions, such as banks and brokerages, are required to monitor transactions for signs of voice phishing and take appropriate actions, such as delaying transactions or freezing payments. However, virtual asset exchanges have faced criticism for lacking these legal responsibilities, leading to inadequate responses to related criminal activities. Under the newly amended law, starting this October, these exchanges will be mandated to monitor suspicious funds and suspend accounts suspected of being involved in fraud. Notably, the refund process will cover situations where victims have had their virtual assets directly stolen or where criminals have converted the victims' money into virtual assets for money laundering purposes.

The law also provides that if a victim chooses, the virtual asset exchanges can convert the stolen virtual assets into cash, facilitating easier compensation for those who may not have experience in trading digital currencies. The Financial Services Commission noted that this amendment extends protective measures to the previously unregulated area of virtual asset transactions, thereby effectively addressing the laundering of criminal funds and enhancing support for victims in recovering their losses. This legal development indicates a significant shift towards improving the safeguarding of digital assets in South Korea.