Japanese Authorities Urge Crypto Exchanges to Impose New Withdrawal Restrictions
Japanese authorities are urging cryptocurrency exchanges to implement new withdrawal restrictions as part of an effort to combat rising fraud. The Financial Services Agency (FSA) and the National Police Agency have jointly issued a request to the Japan Cryptocurrency Exchange Association, calling for stronger safeguards against crimes involving digital assets.
The move comes amid growing complexity in criminal methods, expanding damages to exchange customers, and cases where funds from special frauds are transferred into crypto exchange accounts.
The agencies are directing the association to require member exchanges to impose restrictions on cryptocurrency withdrawals for a certain period after customers deposit fiat currency or purchase crypto assets. Additionally, exchanges must introduce a pre-registration system for withdrawal destinations, with further restrictions on withdrawals for a set period after registration, and set appropriate withdrawal limits.
Further measures include stronger verification at account opening, clearer confirmations and warnings to customers, intensified monitoring of transactions and access environments, and faster action on customer confirmations, transaction restrictions, and account freezes when suspicious activity is detected. Exchanges are also asked to strengthen authentication in cases of suspected impersonation, confirm consistency between bank remitter names and crypto account holders, improve information sharing to detect fraud and unauthorized use, and enhance information provision and collaboration with police.