Japan Urges Crypto Exchanges to Add Withdrawal Delays and Safeguards

TL;DR

• Japan’s FSA and National Police Agency asked crypto exchanges to delay withdrawals after fiat deposits or digital asset purchases to disrupt fraud.
• Exchanges were also urged to pre-register withdrawal addresses, impose waiting periods on new addresses, strengthen monitoring, and use phishing-resistant multifactor authentication.
• The measures are not binding rules, allowing each platform to tailor implementation to its services and risk exposure while authorities push for stronger safeguards against fraudulent transfers.

Japan’s financial regulator is urging cryptocurrency exchanges to make withdrawals deliberately slower, an unusual security approach aimed at disrupting scams before stolen funds disappear. The Financial Services Agency, working with the National Police Agency, asked platforms to introduce waiting periods after users deposit fiat currency or buy digital assets, as concerns continue to grow. The central idea is striking: adding friction could become a defense against fraud in a market built around speed. Authorities said losses among exchange users are increasing, while funds obtained through fraudulent schemes are being transferred into crypto exchange accounts.

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