Korea's FSS overhauls refund system to cover crypto voice-phishing losses

South Korea’s Financial Supervisory Service (FSS) has begun rebuilding the software it uses to return money stolen through voice phishing. 

The change will make it so that from October, the software will be able to calculate and repay losses held as cryptocurrency rather than only in won. 

What is changing about how victims of voice phishing get paid?

South Korea’s Financial Supervisory Service’s (FSS) calculation engine, which returns stolen money to victims of voice phishing scams, assumes a victim’s stolen funds sat in Korean won, which left it unable to fully compensate people whose money had been swapped into digital assets or taken as crypto outright. 

The software’s new system will apply a refund ratio that works out the specific token type and quantity owed to each victim, alongside the won value at the moment a payment was frozen. 

The system is also being redesigned to untangle cases where scam proceeds are split across several accounts and later pooled back together, and to pre-calculate claims in batches instead of computing each one on demand. Victims will see the token name, the number of units, and the frozen-time won value in the electronic notices they receive.

The change is due to a March 31 revision of the Telecommunications Fraud Damage Refund Act to bring virtual assets inside the definitions of both damaged property and refundable property. 

The amendment also means that platforms like Upbit, Bithumb, Coinone, Korbit, and GOPAX will now be required to comply with the same voice-phishing prevention and victim-relief obligations that banks do. They must check the purpose of transactions, watch for suspected phishing funds, freeze payments on a flagged account, and help return victim assets.

When will the new FSS rules go into effect? 

The refund law is set to take effect from October 1, but the FSS will be working on its system from September through the end of November, a roughly three-month job budgeted at 118.53 million won. 

The regulator said it set the three-month timeline in order to handle any faults or extra fixes that might come up after the system goes live.

The revision to the refund law follows a string of cases in which stolen money is deliberately routed through crypto to get it out of the country. The FSS recently warned of a scheme in which scammers take over low-credit borrowers’ bank accounts under the pretense of a loan, buy large volumes of gift certificates with the deposited funds, cash those out, convert the cash into cryptocurrency and remit it to ringleaders overseas. 

Handing over a bankbook or debit card can itself carry up to five years in prison or a fine of up to 30 million won, or about $21,600, under the Electronic Financial Transactions Act. 

Notably, telecom-based fraud losses in the country rose 14.1% to 433.8 billion won in 2025, the highest in five years, according to FSS figures.

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