Japan’s financial regulator has asked crypto exchanges to introduce withdrawal delays and other safeguards as authorities respond to increasingly sophisticated scams involving digital assets.
On Thursday, the Financial Services Agency (FSA) said it had jointly requested the measures with the National Police Agency amid growing losses among crypto exchange users and cases where funds obtained through fraudulent schemes are being transferred to exchange accounts.
The request calls on exchanges to restrict crypto withdrawals for a specified period after customers deposit fiat currency or purchase digital assets. Platforms were also asked to require users to pre-register crypto withdrawal addresses and impose a waiting period before newly added addresses can be used.
The request was submitted to the Japan Virtual and Crypto Assets Exchange Association, the country’s self-regulatory body for crypto exchanges.
Other proposed safeguards include customer-specific withdrawal limits, stronger transaction and access-environment monitoring, phishing-resistant multifactor authentication and checks to ensure that the name of a bank remitter matches the crypto account holder’s name.
The measures are not binding rules. The FSA said exchanges should determine how to implement these based on their operations, services and exposure to misuse.