Japan Orders Crypto Exchanges to Delay Withdrawals Amid Surge in Scam Losses

Japan's Financial Services Agency (FSA) and National Police Agency have asked cryptocurrency exchanges to introduce withdrawal delays as part of an 11-point anti-fraud package. The request was made on August 6, in response to a surge in scam losses involving digital assets.

The FSA wants exchanges to restrict crypto withdrawals for a period after customers deposit fiat currency or buy digital assets, and also require users to register withdrawal destinations in advance with an additional 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.