Japan's FSA tells exchanges: slow your roll ⏳ on withdrawals before scammers make a clean getaway

Japan's Financial Services Agency has asked domestic crypto exchanges to introduce withdrawal delays and a range of additional safeguards in a joint request with the National Police Agency, the regulator said Thursday. The move is a response to increasingly sophisticated scams in which funds obtained through fraudulent schemes are being transferred into exchange accounts, and to rising losses reported by crypto users in the country.

Under the request, exchanges would restrict crypto withdrawals for a specified period after customers deposit fiat currency or purchase digital assets. Platforms were also asked to require users to pre-register withdrawal addresses and to limit withdrawals to newly added addresses for a defined period. The FSA submitted the request to the Japan Virtual and Crypto Assets Exchange Association, the country's self-regulatory body for crypto exchanges.

Additional safeguards outlined in the request include customer-specific withdrawal limits, stronger transaction and access-environment monitoring, phishing-resistant multifactor authentication, and checks to ensure that the name of a bank remitter matches the name of the crypto account holder. The FSA said the measures are not binding rules and that exchanges should determine how to implement them based on their own operations, services and exposure to misuse.

The request comes as the Japanese market continues to see exits and consolidation among international platforms. Separately, Bitget has announced it will exit Japan and close remaining positions after Dec. 31. The FSA has not indicated any changes to the registration or oversight framework tied to the new withdrawal guidance.