Crypto▼ Bearish
Japan FSA Tightens Crypto Exchange Rules on Fraud, Cyber
Japan's FSA and police issued anti-fraud measures requiring withdrawal holds, pre-registered addresses, and faster freezes. A new cyberattack reporting template follows. Public comment open until Sept 7.
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Japan's Financial Services Agency and the National Police Agency sent 11 anti-fraud steps to the country's crypto exchange association on August 6. The measures require exchanges to hold funds in flagged accounts for a set period before withdrawals can start. Users must pre-register destination addresses, and a cooldown period applies before transfers to newly added addresses can go through. Exchanges also need to set withdrawal limits based on customers' holdings and risk profiles.
Each exchange decides how to apply the controls based on its own operations and exposure, the FSA said.
The goal is to slow the movement of stolen funds off Japanese platforms. Once funds leave an exchange and land in wallets outside Japanese jurisdiction, recovery is near impossible. “We are tackling growing losses among crypto exchange users and cases where funds obtained through fraudulent schemes are being transferred to exchange accounts,” the FSA said in a statement.