DAXA Prepares South Korean Crypto Exchanges for October Fraud Refund Law

South Korea’s digital asset exchanges are moving to align with a revised law set to take effect on Oct. 1 that expands refund eligibility for victims of voice phishing scams to include losses in virtual assets. The Digital Asset Exchange Association, or DAXA, held a practical briefing on July 28 at Dreamplus Gangnam in Seoul’s Gangnam district, specifically for non-won exchanges that support only crypto-to-crypto trading.

Scope of the legal revision

The core change under the revised law extends refund protections previously limited to fiat currency losses. Starting in October, victims of telecom fraud — commonly known as voice phishing — can claim compensation for virtual asset losses as well. That makes the rule operationally important for exchanges as well as legally significant for consumers, because it places digital assets inside the same refund framework already used for certain financial fraud cases.

DAXA’s briefing covered institutional readiness and practical compliance steps for affected exchanges. The association emphasized the need for clear internal procedures to handle refund claims, verify fraud cases, and coordinate with law enforcement and financial authorities.

Why non-won exchanges are a focus

Non-won exchanges, which do not handle fiat currency directly, face unique challenges under the new rules. Unlike major won-based platforms, these exchanges operate primarily in crypto-to-crypto pairs, making it more complex to trace, freeze, or return stolen assets. DAXA’s guidance aimed to standardize response protocols across this segment of the market.

For that reason, the briefing was not just a policy update but a practical preparation step ahead of the law’s rollout. Exchanges that rely on internal procedures rather than fiat rails will need defined workflows for identifying eligible claims and responding consistently when cases are referred through the relevant authorities.

Impact on the broader crypto ecosystem

The legal change signals South Korea’s evolving approach to digital asset regulation. By treating virtual assets similarly to fiat currency in fraud refund cases, the government is strengthening investor protections without imposing a blanket ban on crypto trading. In practice, that places more compliance responsibility on exchanges at a time when regulators in many markets are paying closer attention to fraud, custody, and consumer redress in the crypto sector.

Industry observers note that the move may also increase operational costs for smaller exchanges, which must now implement more robust fraud detection and claims processing systems. However, the long-term effect is likely to boost consumer confidence in the market.

Conclusion

With less than three months until the law takes effect, DAXA’s briefing provides a roadmap for compliance. The October rollout will test how well South Korea’s crypto exchanges — especially those operating without fiat on-ramps — can adapt to expanded refund obligations. The outcome may influence future regulatory frameworks in Asia and beyond.