Japan’s Financial Regulator Urges Crypto Exchanges to Add Withdrawal Delays Amid Scam Surge

Japan’s Financial Services Agency has asked crypto exchanges to introduce withdrawal delays and additional security measures as authorities work to counter increasingly sophisticated crypto-related scams.

Joint Request From Regulators

The FSA announced Thursday that it submitted the request jointly with the National Police Agency, citing rising losses among crypto exchange users and cases where scam proceeds were being funneled into exchange accounts. The request was sent to the Japan Virtual and Crypto Assets Exchange Association, the country’s self-regulatory body overseeing crypto platforms.

What Exchanges Are Being Asked to Do

Under the request, exchanges would restrict crypto withdrawals for a set period after users deposit fiat currency or purchase digital assets. Platforms would also need to require customers to pre-register withdrawal addresses in advance, with a waiting period before any newly added address could be used for withdrawals.

Additional Safeguards Proposed

Other suggested measures include setting customer-specific withdrawal limits, strengthening monitoring of transactions and login environments, adopting phishing-resistant multifactor authentication, and verifying that bank remitter names match the crypto account holder’s name. The FSA clarified that these measures are not mandatory rules, leaving exchanges to decide how to implement them based on their own operations, services, and exposure to potential misuse.