South Korea opens comment on crypto fraud refund rules ahead of Oct. 1

South Korea’s Financial Services Commission has proposed detailed enforcement rules to let victims of voice phishing recover virtual assets for the first time, closing a gap that had excluded crypto from the country’s telecom fraud relief system. The draft amendment, open for public comment from July 15 through Aug. 24 and targeted for Oct. 1 implementation, follows a March 31 revision to the parent law that expanded recoverable assets from money to virtual assets. Under the proposal, cash refunds would be paid in monetary units, while virtual-asset refunds would be returned by token type and quantity. If the stolen asset differs from what remains in a fraud-linked account, the refund would be made using the asset present when a payment suspension is imposed. In mixed accounts, cash would be valued at face value and virtual assets at market price at the time of the freeze, a method the FSC said is meant to support faster and fairer repayment when assets from multiple victims are commingled. The draft also creates a legal basis for the FSC to designate an institution that can sell refundable crypto on behalf of victims and pay them in cash, addressing cases where victims have no trading experience or exchange account. The move comes as South Korea broadens its response to crypto-enabled telecom fraud from disrupting laundering channels to building a formal restitution route for victims, alongside separate October plans for new Supreme Court procedures covering the seizure and liquidation of cryptocurrency in civil enforcement.