Japan’s Financial Services Agency (FSA), in coordination with the National Police Agency, has formally requested that domestic cryptocurrency exchanges introduce withdrawal delays and stricter account safeguards to combat fraudulent schemes targeting retail investors. The joint directive was submitted to the Japan Virtual and Crypto Assets Exchange Association (JVCEA), the nation’s self-regulatory industry body, amid rising financial losses from online scams and illicit money transfers.
Under the proposed guidelines, platforms are encouraged to temporarily hold cryptocurrency withdrawals following fiat currency deposits or asset purchases. Regulators also called on exchanges to implement pre-registration requirements for external withdrawal addresses, alongside mandatory waiting periods before new wallet destinations become active. Additional safeguards include customer-specific withdrawal caps based on risk profiling, enhanced transaction monitoring, phishing-resistant multi-factor authentication, and strict name-matching checks between remitting bank accounts and exchange user profiles.
While the recommendations do not constitute legally binding regulations, the FSA expects individual exchanges to tailor and deploy these operational controls based on their specific risk exposure and user activity. The voluntary measure reflects Japan’s broader policy push to dismantle digital financial crime pipelines without imposing immediate legislative overhauls on compliant platforms.
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