South Korea's Financial Services Commission (FSC) announced on March 15 that it has prepared an amendment to the enforcement decree of the Special Act on Prevention of Voice Phishing and Refund of Damages, allowing victims of voice phishing involving virtual assets to seek refunds under the law. The amendment, which will be pre-announced for legislation, addresses a regulatory gap where virtual assets were not explicitly included as refundable assets, despite a rise in criminal organizations converting stolen funds into crypto to evade tracking.
New Refund Rules for Virtual Assets
The amendment, a follow-up to the revised special law taking effect on October 1, specifies the form and calculation standards for refunds. The basic principle is to refund money in monetary units and virtual assets by type and quantity. However, if the asset initially taken differs from what remains in the frozen account or wallet, the refund will be based on the asset form at the time of the freeze.
Handling Mixed Assets and Fair Valuation
For cases where different assets are mixed, the rules are clear: money is reflected at face value, while virtual assets are valued at market price at the time of the freeze to calculate the total refundable amount. This approach addresses the high price volatility of virtual assets, ensuring fairness among victims when funds are commingled. The FSC believes this will enable faster and more equitable refunds in multi-victim cases.
Support for Victims Without Crypto Experience
Victims who lack experience or accounts for virtual asset trading may face difficulties in recovering losses directly. To address this, the FSC will designate a dedicated agency to sell refundable virtual assets and distribute the proceeds in cash. The agency must meet criteria set by the FSC, including having the organization and personnel to handle user protection and loss recovery.
The amendment will undergo legislative pre-announcement until April 24, followed by further procedures to align with the law's implementation date. The FSC expects this revision to establish an effective refund system for voice phishing involving virtual assets, reflecting the trend of expanding victim relief from traditional bank accounts to digital assets.