Japan urges crypto exchanges to impose withdrawal delays

Japanese financial authorities have requested cryptocurrency exchanges to implement new security measures, including withdrawal delays and address pre-registration, in response to a surge in scam-related losses. The Financial Services Agency (FSA) and the National Police Agency (NPA) made the joint request to the Japan Virtual and Crypto Assets Exchange Association (JVCEA), the industry's self-regulatory body, on August 6.

The 11-point request asks exchanges to restrict crypto withdrawals for a period after customers deposit traditional currency or purchase digital assets. It also calls for users to pre-register withdrawal addresses and for a waiting period to be imposed before newly added addresses can be used. The authorities did not mandate specific timeframes, leaving individual exchanges to tailor the controls based on their services and risk profiles. Other requested safeguards include customer-specific withdrawal limits, enhanced transaction monitoring, phishing-resistant multi-factor authentication, and checks to ensure the name of a bank remitter matches the crypto account holder.

The measures are requests, not binding rules, and implementation is expected to vary by...