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Japan FSA asks crypto exchanges to impose withdrawal delays to fight scams
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Japan's financial regulator has asked cryptocurrency exchanges to introduce withdrawal delays as part of a broader push against scams. The Financial Services Agency (FSA) made the request jointly with the National Police Agency on Thursday. The move comes amid growing losses among crypto exchange users and cases in which funds from fraudulent schemes are transferred to exchange accounts.
The request calls on exchanges to restrict crypto withdrawals for a specified period after customers deposit fiat currency or purchase digital assets. Platforms are also asked to require users to pre-register crypto withdrawal addresses and impose a waiting period before newly added addresses can be used. These steps are designed to hamper criminals who rely on quick transfers.
The request was submitted to the Japan Virtual and Crypto Assets Exchange Association, the self-regulatory body for crypto exchanges. Other proposed safeguards include customer-specific withdrawal limits, stronger transaction monitoring, phishing-resistant multifactor authentication, and checks to ensure the bank remitter's name matches the account holder's name.
These measures are not binding rules. The FSA said exchanges should determine how to implement them based on operations, services, and exposure to misuse. This leaves room for flexibility but also creates uncertainty about enforcement.
The joint request signals a coordinated regulatory response between financial and law enforcement authorities. It underscores the growing concern that crypto exchanges are being used as laundering channels. Exchanges will likely adopt the measures to maintain trust and avoid stricter regulation.
Looking ahead, the guidelines could be followed by formal rules if voluntary implementation fails. Meanwhile, the exchange Bitget recently announced its exit from Japan, with remaining positions to be closed after December 31. This highlights the intensifying compliance pressure on crypto businesses in the country.
