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, address registration and stronger fraud controls as authorities respond to rising scam losses involving digital assets.
Summary
- Japan’s FSA asked crypto exchanges to delay certain withdrawals as authorities respond to rising scams.
- Exchanges should pre-register withdrawal addresses and impose waiting periods before newly added destinations become usable.
- Japan recorded 18,067 fraud cases through May, with losses reaching 151.47 billion yen.
- The FSA wants stronger monitoring, phishing-resistant authentication, personalized limits and faster freezing of suspicious accounts.
- No uniform withdrawal period was mandated, leaving implementation details to individual exchanges and risk profiles.
The request went to the Japan Virtual and Crypto Assets Exchange Association, the industry’s self-regulatory body.The measures are requests rather than 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.
Withdrawal delays are part of an 11-point anti-fraud package
The FSA wants exchanges to restrict crypto withdrawals for a period after customers deposit fiat currency or buy digital assets. It also asked platforms to require users to register withdrawal destinations in advance and impose another waiting period after a new address is added. The regulator did not specify either period’s length.
Exchanges were also asked to set withdrawal limits using customer risk, assets held, transaction purposes and previous activity. Regulators want firms to review customers who rapidly make large or frequent withdrawals 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 also 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 also expected to share fraud indicators and provide information rapidly to police.
Scam losses explain Japan’s tougher exchange controls
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, while 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.
As previously reported, Japan has also been tightening crypto oversight while moving digital assets closer to mainstream financial regulation. The withdrawal initiative fits that wider emphasis on investor protection and compliance.
What changes for Japanese crypto exchange users
The immediate effect will depend on each exchange. Because the FSA prescribed no single waiting period, users should not assume every Japanese platform will apply identical delays. Some operators already maintain withdrawal restrictions. SBI VC Trade, for example, says funds tied to certain quick deposits cannot be withdrawn or transferred as crypto until the eighth day.
For users, visible changes could include slower first-time withdrawals, mandatory address registration, personalized limits and more verification when activity differs from normal behavior. A customer adding a new wallet and immediately attempting a large transfer could face additional checks or a temporary hold.
The safeguards may also affect legitimate users who need rapid access to self-custody wallets. However, the FSA says implementation should reflect each operator’s business model and misuse experience. It does not order exchanges to impose a blanket freeze on every withdrawal.
Travel Rule requirements already require exchanges to collect and share identifying information for certain transfers. Japan’s newest request adds transaction friction and behavioral monitoring to those identity-based controls.
What happens next for Japan’s crypto exchanges
The FSA and police asked the JVCEA and member exchanges to strengthen the measures from August. Exchanges must assess which controls require policy or system changes and how quickly they can deploy them. The official request says planned implementation is acceptable where immediate technical changes are difficult.
No uniform start date or mandatory delay length was announced. The next developments to watch are exchange-specific notices, possible JVCEA guidance and any later move by the FSA to convert parts of the request into formal supervisory requirements. Until then, implementation is likely to vary by platform in practice.
