Japan Cracks Down on Crypto Scams with Stricter Exchange Controls

Japan's Financial Services Agency (FSA) and National Police Agency are cracking down on cryptocurrency scams by urging exchanges to implement stricter controls. The joint request, sent to the Japan Virtual and Crypto Assets Exchange Association, recommends 11 measures to prevent scam proceeds from being transferred.

The recommended measures include temporarily restricting crypto withdrawals after customers deposit fiat currency or purchase digital assets, requiring advance registration of withdrawal addresses, and imposing a waiting period after a new address is added. Authorities also want exchanges to implement risk-based withdrawal limits, stronger transaction and access monitoring, and additional authentication when impersonation is suspected.

The request follows a sharp rise in fraud across Japan, with police recording 5,099 social media investment scams involving losses of ¥70.04 billion during the first five months of 2026. The FSA said customers are increasingly losing digital assets, and proceeds from other scams are being transferred into crypto exchange accounts.

The authorities have not prescribed a common waiting period or implementation date, leaving it up to individual exchanges to decide when to introduce restrictions based on their systems and assessment of customer risk.