Seoul – Victims of voice phishing scams who lose crypto assets may soon get their money back. South Korea’s Financial Services Commission on July 15 opened a public comment period on revised rules that for the first time treat virtual assets the same as cash in telecom fraud refunds.
The problem is clear: scammers have been using crypto to launder stolen funds, but the existing law – the Special Act on the Prevention of Telecommunications Financial Fraud and the Refund of Fraud Proceeds – only covered cash. Criminals exploited that gap. The amended law, which takes effect Oct. 1, expands the refundable asset scope to include virtual assets. The new enforcement decree, now out for comment, spells out exactly how refunds will work.
The key change is the refund method. If the stolen asset was cash, victims get cash back by amount. If it was a virtual asset, they get back the same token type and quantity held in the fraud-linked account when payment is frozen. When the stolen asset’s form differs from what remains – say a scammer turned cash into ether – the refund will be in whatever asset sits in that account at freeze time.
Mixed accounts get a blended treatment. Cash is counted at face value. Virtual assets are valued at market prices on the freeze date to determine the refund share.
A practical problem remains: many victims have never traded crypto and have no wallet or exchange account. To help them, the FSC will designate a dedicated institution that can sell refunded tokens on their behalf and pay out the cash proceeds. Eligible institutions must meet FSC requirements on user protection and victim recovery capabilities.
The proposal is open for public comment until Aug. 24. After that, it goes through final procedures and will take effect alongside the amended law on Oct. 1.
For traders, the takeaway is a clearer legal framework. Faster, fairer refunds when multiple victims’ funds are commingled. And the designation of a state-backed sales agent could become a new liquidity channel for frozen tokens – a detail worth watching as the rule takes shape.
South Korea proposes refunds for crypto lost in phone scams, like cash
South Korea’s Financial Services Commission opened public comments on rules that would, for the first time, treat crypto assets like cash when refunding victims of voice-phishing scams; the amended law takes effect Oct. 1. Victims would generally receive the same type and amount of crypto assets held when the account is frozen, or whatever crypto assets remain if the stolen funds were exchanged.