Japan FSA pushes crypto withdrawal delays after scam surge

Japan’s Financial Services Agency and National Police Agency asked cryptocurrency exchanges on Aug. 6 to introduce withdrawal delays and tighten fraud controls, including requiring customers to register withdrawal destinations in advance. The request went to the Japan Virtual and Crypto Assets Exchange Association, the industry’s self-regulatory body.

The measures are requests, not a binding rule. The FSA did not set a nationwide waiting period. Exchanges should tailor controls to their services and risk profiles. System changes may be phased.

The regulator wants platforms to restrict crypto withdrawals for a period after users deposit fiat or buy digital assets. It also wants a waiting period after a new address is added. Neither period was specified. Exchanges should set withdrawal limits based on customer risk, assets held, transaction purpose and past activity. Firms must review customers who make large or frequent withdrawals quickly after restrictions end, adding friction where scam proceeds can leave an exchange.

The request goes beyond withdrawal timing. Exchanges should strengthen transaction and access monitoring, detect activity inconsistent with customer profiles and identify accounts using devices linked to known misuse. Authorities want suspicious transactions handled faster through holds, withdrawal restrictions or account freezes.

For higher-risk activity, regulators requested phishing-resistant multifactor authentication and stronger impersonation checks. Platforms should compare the name of a bank remitter with the crypto account holder and respond to mismatches. Exchanges are expected to share fraud indicators and provide information rapidly to police.

The National Police Agency’s latest published figures show why regulators are increasing pressure. Through May 2026, Japan recorded 18,067 special fraud cases, with losses reaching 151.47 billion yen. SNS investment scams accounted for 5,099 cases and 70.04 billion yen in losses. SNS romance scams caused another 20.2 billion yen. The trend was already visible in 2025. Police recorded 9,523 SNS investment scam cases with 128.8 billion yen lost. Romance scams reached 5,645 cases and 54.64 billion yen. Crypto-transfer romance scams rose to 2,177 cases, with 24.77 billion yen lost, helping explain the focus on digital-asset transfers.

Japan had already targeted the banking side. 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 strengthen monitoring of suspicious transfers. The latest request extends similar safeguards into exchange withdrawal systems.