Japan Tightens Crypto Withdrawal Rules to Combat Record Fraud

The regulatory push targets the speed at which funds leave exchange ecosystems. Under the new guidance, platforms are encouraged to require users to pre-register withdrawal addresses and enforce waiting periods before those destinations become active. These measures aim to create friction for scammers who rely on rapid, multi-stage transfers to drain victim accounts. While the FSA has not mandated a uniform duration for these holds, it expects firms to tailor restrictions based on individual risk profiles, transaction history, and account behavior.

Beyond withdrawal timing, the directive mandates more robust authentication, including phishing-resistant multi-factor tools and stricter verification when bank remitter names fail to match crypto account holders. Exchanges are also expected to monitor for activity that deviates from a user's typical profile, such as sudden large-scale transfers. The Japan Virtual and Crypto Assets Exchange Association has received these requests, and while they remain non-binding for now, regulators expect swift adoption. Platforms like SBI VC Trade already utilize similar "cooling-off" periods, and the broader industry is now expected to integrate these safety nets into their internal policies to stem the tide of digital asset theft.