South Korea proposes refund rules for crypto lost in voice phishing scams

Scope of the proposed revision

On July 15, the FSC said it would seek views on changes to the enforcement decree of the Special Act on the Prevention of Telecommunications Financial Fraud and the Refund of Fraud Proceeds. The main revision would expand refund eligibility beyond money to include virtual assets.

The measure is intended to address cases where fraud victims lose crypto through telecom-based scams but face gaps in the current recovery system. According to the FSC, the change is aimed at improving how refunds are handled in such cases.

How crypto refunds would be calculated

Under the proposal, refunds for virtual assets would be determined by the type and amount of tokens involved. Their value would be calculated using the market price at the moment payment is suspended.

The draft also sets out how to deal with situations in which the asset originally taken from a victim is different from the one left in the fraud account when authorities halt payment. In that case, the refund would be made based on the asset that remains in the account at the time of suspension.

If more than one asset type is involved, the rules would treat them differently for valuation purposes. Cash would be counted at face value, while virtual assets would be priced according to their market value at the time the payment suspension takes effect.

Planned support for liquidation and cash payouts

The FSC also said a dedicated institution would be designated to help sell virtual assets that are eligible for refunds. The purpose of that arrangement is to convert those assets into cash so victims can receive payouts in monetary form.

This mechanism is meant to support practical distribution of recovered value, particularly in cases where digital assets need to be liquidated before compensation can be made.

Why the change matters

The commission said the revision is designed to enable faster and fairer refunds, especially in cases where money or assets from several victims have been mixed together in the same fraudulent account. Such commingling can make the refund process more difficult under a system built primarily around cash.

Public consultation on the decree revision runs from July 15 to August 24. The updated rules are set to take effect in line with the amended law after the comment period.

The proposal reflects South Korea’s effort to close recovery gaps for victims of voice phishing and other telecommunications financial fraud involving virtual assets, while keeping the refund process tied to asset type, quantity, and market value at the time authorities suspend payment.