Can Bitcoin Sent to Voice Phishing Scammers Be Stopped Like a Bank?

[Block Media, Attorney Jeong Seung-man] "Attorney, I was a victim of voice phishing and sent Bitcoin to an account address designated by the scammer at a domestic exchange. Can I request a payment suspension from the domestic exchange?"

Recently, as voice phishing methods have diversified, there have been cases where victims are not only asked to transfer cash or make bank transfers but also to transfer digital assets to personal wallets or exchange account addresses specified by the scammers.

Of course, for domestic exchange accounts, real-name verification and registration of real-name verified deposit and withdrawal accounts are required, so it is possible to identify the account or account holder. However, in most cases, these crimes are committed using accounts that do not belong to the scammers themselves, often belonging to unsuspecting third parties. This is akin to using a "dummy bank account".

So, if a victim has been defrauded of digital assets by a scammer, can they directly request a payment suspension for the scammer's account at a domestic digital asset exchange?

The previous Special Act on the Prevention of Telecommunications Financial Fraud and the Refund of Damages primarily established procedures for victim relief centered around financial institutions' "accounts". Therefore, if a victim directly transferred digital assets to the scammer's exchange account address, it was difficult to apply the victim relief procedures against the exchange.

Until now, the approach has been to minimize damage by requesting payment suspensions on the scammer's bank accounts linked to the exchange or the exchange's own bank accounts (master accounts) or by suspending the scammer's account by the exchange itself.

However, the law was amended on March 31, 2026, and the revised law is set to take effect on October 1, 2026. Now, digital asset exchanges are included in the definition of "financial companies", and legal grounds have been established for victims of telecommunications financial fraud using digital assets to request payment suspensions for the scammer's account from the exchange or to apply for the return of the victim's assets.

Specifically, the revised law states in Article 2, Clause 2, Item a that "telecommunications financial fraud" includes not only acts that deceive others into sending or transferring funds but also acts that require the transfer of digital assets. It also includes "fraudulent use accounts" and "suspected accounts related to fraud" that encompass the accounts to which the victim's digital assets were transferred and related accounts or accounts suspected of receiving the victim's digital assets (Items 4 and 8).

Additionally, the definition of "victim assets" has been expanded to include digital assets transferred via fraudulent use accounts, and "assets for victim refunds" now includes digital assets paid to victims by financial companies, establishing a victim relief procedure that is almost identical to that for voice phishing using traditional bank accounts (Items 5 and 6).

Furthermore, digital asset exchanges now have a temporary obligation to delay or suspend transfers, remittances, withdrawals, or digital asset transfers for "suspected transaction accounts" (Article 2-5), and there is an obligation to verify the purpose of financial transactions in special cases to prevent telecommunications financial fraud (Article 2-6).

Moreover, victims and investigative agencies can request payment suspensions for fraudulent use accounts or accounts from digital asset exchanges. Upon receiving such requests, exchanges are obligated to check transaction histories and, if there are reasonable grounds to suspect that the account is a fraudulent use account, they must immediately implement payment suspension measures for that account (Article 4).

After that, the process for initiating a claim and objection procedures will follow, leading to the Financial Supervisory Service's determination of the victim refund assets and the actual refund procedures by financial companies.

Additionally, the amended law provides a basis for digital asset exchanges to sell the victim's digital assets upon the victim's request and pay the proceeds in cash if the victim refund assets are digital assets (Article 10, Clause 4).

Meanwhile, the law's provisions apply retroactively to victims who were defrauded of digital assets before the effective date, allowing these victims to also apply for payment suspensions and other relief measures from the exchange.

So, what happens if a victim transfers digital assets to an overseas personal wallet or overseas exchange account designated by the scammer?

The scope of financial companies as defined by the law includes domestic financial companies, cooperatives, and some foreign companies with domestic branches, and while digital asset exchanges are not limited to domestic companies, it is practically difficult to apply the victim relief procedures defined by this law to overseas exchanges or other foreign companies.

Therefore, investigative agencies will need to request separate cooperation from overseas exchanges or collaborate with foreign investigative agencies to identify the scammers, and victims will need to communicate directly with the relevant exchanges or overseas wallet service providers, requiring more personal effort from the victims.

The upcoming amended law is significant in that it establishes victim relief procedures against exchanges for digital assets, similar to those for traditional bank deposits in cases of voice phishing.

However, digital assets can be transferred quickly through multiple addresses, and even if transaction histories are tracked, it can be challenging to match wallet addresses or accounts with the actual scammers, which may limit the recovery of losses.

Therefore, it is crucial for victims of digital asset voice phishing to promptly inform investigative agencies and exchanges as soon as they recognize the crime.

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