To prevent the rise in cryptocurrency frauds, Japan’s Financial Services Agency (FSA) has requested that cryptocurrency exchanges implement withdrawal delays and more robust security measures.
The regulator has recommended required waiting periods for newly added wallet addresses, improved fraud detection, and temporary limitations on withdrawals following cryptocurrency purchases in collaboration with the National Police Agency. With more and more criminals using cryptocurrency exchanges to transfer stolen money, the measures are meant to protect consumers.
As fraud involving digital assets continues to increase, Japan is ramping up its efforts to protect cryptocurrency investors. The National Police Agency and the nation’s Financial Services Agency (FSA) have requested that cryptocurrency exchanges implement further security measures that could make it more difficult for con artists to swiftly transfer money that has been stolen.
The plan is in reaction to a rise in instances when victims are duped into sending money, which is subsequently transformed into cryptocurrency and transferred via exchange accounts. Slowing down withdrawals and bolstering identification verification, according to authorities, may assist lower financial losses and increase the likelihood of identifying fraudulent activities.
Exchanges have been urged to implement a waiting time before clients may withdraw cryptocurrencies following fiat currency deposits or purchases of digital assets. Additionally, before newly added addresses are allowed for withdrawals, regulators advise users to pre-register their cryptocurrency wallet addresses and wait a predetermined amount of time.
Additionally, the FSA has recommended phishing-resistant multi-factor authentication, customer-specific withdrawal limitations, improved transaction and login environment monitoring, and confirmation that the name on the bank account transferring cash corresponds to the registered cryptocurrency account holder.
The Japan Virtual and Crypto Assets Exchange Association, the nation’s self-regulatory body for cryptocurrency exchanges, has received the suggestions. The regulator wants exchanges to decide how best to adopt the ideas based on their business models, operational concerns, and client profiles, even if they are not legally enforceable.
Japan’s cryptocurrency industry has long been considered one of the most regulated in the world, especially in the wake of the well-publicized collapse of Mt. Gox. The most recent suggestions indicate that regulators are now focusing more on preventing fraud as hackers utilize more advanced techniques to target consumers of digital assets.
The changes might briefly slow down transactions if they are widely implemented, but they could also greatly improve user protection. The action is also part of a larger worldwide trend in which authorities are putting more pressure on cryptocurrency service providers to improve security without limiting the lawful usage of digital assets.
THE BLOCK: Japan’s FSA, along with the National Police Agency, pressed the country’s crypto exchange association to tighten fraud controls as scam losses climb on Thursday.
The 11-point ask includes withdrawal delays after fiat deposits, pre-registered withdrawal destinations… pic.twitter.com/PRtQYgTYcR
— The Block (@TheBlockCo) August 6, 2026
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