Japan Regulators Push Crypto Exchanges to Add Withdrawal Delays and Anti-Fraud Controls

Headline: Japan’s regulators push crypto exchanges to add withdrawal delays and tougher fraud controls after surge in scams Japan’s Financial Services Agency (FSA) and National Police Agency (NPA) on Aug. 6 asked the country’s crypto industry to introduce withdrawal delays, pre-registered addresses and stronger anti-fraud protections as they respond to a sharp rise in scam losses involving digital assets. The request was made to the Japan Virtual and Crypto Assets Exchange Association (JVCEA), the sector’s self-regulatory body — and for now it is guidance, not a binding rule. What regulators want - Temporary withdrawal holds after fiat deposits or crypto purchases, and an additional waiting period when users add a new withdrawal address. The FSA did not specify exact lengths for these delays and said exchanges should tailor intervals to their service and risk profile. - Advance registration of withdrawal destinations and controls that re-check accounts when customers make large or rapid withdrawals after restrictions end. - Personalized withdrawal limits based on customer risk, assets held, transaction purpose and past behavior. - Stronger transaction and access monitoring to detect activity inconsistent with customer profiles, plus the ability to flag accounts using devices linked to known misuse. - Faster, tougher responses to suspicious transactions, including holds, withdrawal restrictions or account freezes. - Phishing-resistant multi-factor authentication and better checks to prevent impersonation in high-risk cases; compare remitter bank names with crypto account owners and act on mismatches. - Rapid sharing of fraud indicators and faster information transfers to police. Why now: scam numbers and losses The NPA’s latest published figures through May 2026 underline the pressure on regulators. Japan recorded 18,067 “special fraud” cases totaling around 151.47 billion yen in losses. Social-media (SNS) investment scams accounted for 5,099 cases and about 70.04 billion yen in losses; SNS romance scams caused a further roughly 20.2 billion yen in losses. Earlier data already showed the trend: in 2025 police recorded 9,523 SNS investment-scam cases with 128.8 billion yen lost, and 5,645 romance-scam cases with 54.64 billion yen lost. Crypto-transfer romance scams reached 2,177 cases in that period, with losses of about 24.77 billion yen — a key reason regulators are focusing on digital-asset withdrawals. Context and precedent This move extends earlier action aimed at banks. In February 2024 the FSA and police urged financial institutions to block transfers to crypto exchange accounts when the sender name differed from the originating bank account and to step up monitoring of suspicious transfers. The new guidance pushes similar safeguards into exchange withdrawal processes and dovetails with Japan’s broader tightening of crypto oversight and investor-protection measures. What this means for exchanges and users - Implementation will vary by platform. The FSA explicitly avoided a nationwide waiting period; it told exchanges to phase in system changes where needed and to adapt controls to their business models and misuse experience. - Some operators already impose limits. For example, SBI VC Trade says certain quick deposits cannot be withdrawn or converted to crypto until the eighth day. - Users should expect more friction: slower first-time or newly-addressed withdrawals, mandatory address registration, personalized limits and extra verification if behavior looks anomalous (for example, adding a new wallet and immediately making a large transfer). - Legitimate users who need rapid transfers to self-custody wallets may be inconvenienced, but the regulator did not order blanket freezes on withdrawals. Next steps The FSA and police asked the JVCEA and member exchanges to strengthen controls starting in August, asking exchanges to assess which policies and system changes are feasible immediately and which require phased implementation. There’s no single start date or mandated delay length; the next items to watch are exchange-specific notices, any JVCEA guidance, and whether the FSA turns parts of the request into formal supervisory requirements. Until then, users should expect divergent practices across platforms.