Virtual Assets Stolen by Voice Phishing Can Also Be Recovered

Financial Services Commission Pre-announces Amendment to Special Act Enforcement Decree
Virtual Assets Now Included as Eligible for Victim Relief

From now on, victims of virtual asset theft due to voice phishing will also be able to recover their losses. The financial authorities will specify the refund procedures and evaluation criteria, and designate a dedicated institution to support the sale of virtual assets for the practical recovery of losses.

On July 15, the Financial Services Commission announced that it would draft and pre-announce legislation for the amendment to the Enforcement Decree of the "Special Act on the Prevention of Telecommunications Financial Fraud and Refund of Stolen Funds," which includes these measures.

Recently, there has been a growing number of cases where virtual assets are misused in telecommunications financial fraud, including voice phishing. However, the current system does not include virtual assets as eligible for victim relief, leaving a legal blind spot for these crimes. Consequently, the Special Act was amended to expand the definition of victim assets from monetary assets to include virtual assets. With this follow-up measure, the amendment to the Enforcement Decree further details the items delegated by the law.

According to the amendment, the methods for refunding and the standards for calculation and evaluation of victim refund assets have been clearly defined. If the victim refund asset is money, refunds are provided in terms of currency units; if the asset is a virtual asset, it is provided by type and quantity to the victim as a basic principle. However, if the form of the stolen asset differs from the form of the asset present in the fraudster’s frozen account, the refund will be made in the form of the asset that remains at the time of account freezing. In addition, if both money and virtual assets are present, monetary assets are assessed at face value, while virtual assets are evaluated based on the market price at the time of account freezing, to determine the amount of the victim refund assets.

There are also support measures for victims with no experience in virtual asset transactions. If the stolen funds were converted into virtual assets during money laundering and subsequently frozen, in principle, the victim will be refunded in virtual asset form. However, since victims with no experience in trading virtual assets or who do not hold virtual asset accounts may face difficulties maintaining or liquidating the assets, the Financial Services Commission can designate a dedicated institution to sell the virtual assets on their behalf and remit the proceeds as money. This institution must meet requirements set by the Commission, including having the organizational structure and personnel necessary to protect users of virtual assets and support recovery for victims.

An official from the Financial Services Commission stated, "This revision of the Enforcement Decree will provide a legal foundation for effective refunds of victim assets in telecommunications financial fraud involving virtual assets," adding, "By clearly specifying the form of refund assets and the timing of evaluation, we expect swift and fair refunds to be possible even in cases where the funds of multiple victims are mixed."

This amendment to the Enforcement Decree is set for legislative notice until August 24, and will go through procedures such as review by the Regulatory Reform Committee, approval by the Financial Services Commission, review by the Ministry of Government Legislation, and resolutions in the Vice Ministers' and Cabinet meetings, before coming into force in October.

This content was produced with the assistance of AI translation services.