Japan's Financial Services Agency and the National Police Agency jointly asked the country's crypto exchange self-regulatory body to implement withdrawal delays and a broader set of anti-fraud measures, citing a surge in losses from social media investment scams and romance fraud that routed proceeds through digital asset platforms.
The request went to the Japan Virtual and Crypto Assets Exchange Association on Thursday. It covers 11 distinct areas and is not a binding rule. The FSA said exchanges should determine how to apply the measures based on their operations, services, and exposure to misuse. Where system changes require time, planned implementation is acceptable.
The withdrawal delay request has two parts. Exchanges should restrict crypto withdrawals for a period after customers deposit fiat currency or purchase digital assets. They should also require users to register withdrawal addresses in advance and impose a separate waiting period before newly registered addresses can receive transfers. The FSA did not prescribe a specific duration for either delay. Some exchanges already operate similar controls. SBI VC Trade, for example, states that funds tied to certain quick deposits cannot be withdrawn or transferred as crypto until the eighth day.
What the scam data shows and why withdrawals became the focus
The National Police Agency's figures show the scale of the problem that prompted the request. Through May 2026, Japan recorded 18,067 special fraud cases, with losses reaching 151.47 billion yen. SNS investment scams accounted for 5,099 cases and 70.04 billion yen in losses. SNS romance scams caused a further 20.2 billion yen in harm.
The 2025 figures were already alarming. Police recorded 9,523 SNS investment scam cases with 128.8 billion yen lost. Romance scams reached 5,645 cases and 54.64 billion yen. Crypto-transfer romance scams rose to 2,177 cases, with 24.77 billion yen lost. That last figure explains why regulators focused specifically on the speed and ease with which scam proceeds can exit exchanges through withdrawal systems.
Japan had already targeted the banking side of the transfer chain. In February 2024, the FSA and police urged financial institutions to block transfers to crypto exchange accounts when the sender name differed from the originating bank account. Thursday's request extends comparable safeguards into the exchange withdrawal layer, creating pressure at both ends of the money movement path.
The full scope of the request beyond withdrawal timing
The FSA asked exchanges to set withdrawal limits that reflect each customer's risk profile, assets held, stated transaction purposes, and prior activity. Regulators want exchanges to apply additional scrutiny to customers who make large or frequent withdrawals soon after any waiting period ends, because that pattern is consistent with scam proceeds being moved out quickly once initial restrictions lift.
Transaction monitoring requirements go further. Exchanges should detect activity inconsistent with a customer's known profile and flag accounts using devices associated with prior misuse. When suspicious activity is detected, the FSA wants exchanges to move quickly. If fraud is confirmed, the exchange must immediately stop or freeze relevant withdrawals and deposits. If confirmation is not immediately possible, transactions should be paused while deeper verification takes place. The FSA also specified that exchanges must maintain a 24-hour response capability covering nights and holidays.
For higher-risk scenarios, the request asks for phishing-resistant multifactor authentication and stronger checks on cases where impersonation is suspected. Exchanges should also compare the name of a bank remitter with the registered name of the crypto account holder and respond to any mismatch. Fraud indicators should be shared between exchanges, and police should receive relevant information rapidly.
What changes for individual users and what stays platform-specific
The practical effect will differ by exchange because no single waiting period was mandated. Users should not assume uniform delays across Japanese platforms. Those who already use an exchange with existing cooling-off rules may see little change. Those on platforms with fewer current restrictions could face new requirements once exchanges respond to the JVCEA request.
For any user, visible changes could include slower first-time withdrawals to new addresses, mandatory address pre-registration, personalized withdrawal limits, and additional verification when transaction patterns differ from prior behavior. A customer who adds a new wallet address and immediately attempts a large transfer could face additional checks or a temporary hold regardless of whether their intent is legitimate.
The measures will also affect users who need fast access to self-custody wallets, a category the FSA acknowledged. The official request states that implementation should reflect each operator's business model and misuse experience rather than applying a blanket freeze to every withdrawal.
Travel Rule requirements already oblige exchanges to collect and share identifying information for certain transfers across counterparties. The new request adds behavioral monitoring and transaction friction on top of those identity-based controls, extending the compliance surface from who the customer is to how they use their account.
No uniform start date was announced. The next developments to watch are exchange-specific policy notices, any further JVCEA guidance to members, and whether the FSA later converts parts of the request into formal supervisory requirements. Until that happens, how quickly and how strictly individual platforms respond will vary.
Jordan V.
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