Japan's Financial Services Agency and National Police Agency are jointly pressing the country's crypto exchanges to add new withdrawal restrictions as fraud losses grow. The agencies want delayed withdrawals after deposits, a pre-registration system for withdrawal addresses, and tighter monitoring of suspicious accounts. The push targets funds from scams that get funneled through crypto exchange accounts.
Japan's Financial Services Agency and the National Police Agency are jointly urging the Japan Cryptocurrency Exchange Association to strengthen safeguards against fraud involving cryptocurrencies. The request comes as criminal methods grow more complex and damage to exchange customers expands, with cases in which funds from special frauds are transferred into crypto exchange accounts.
The agencies direct the association to require members to restrict cryptocurrency withdrawals for a set period after customers deposit fiat currency or purchase crypto assets. Exchanges must also introduce a pre-registration system for withdrawal destinations, with further restrictions on withdrawals for a set period after registration, and set appropriate withdrawal limits.
Additional measures include stronger checks to prevent irregularities at account opening, clear confirmations and warnings to customers, and intensified transaction and access-environment monitoring. The agencies also want faster action on customer confirmations, transaction restrictions, and account freezes once suspicious activity is detected.
Exchanges are further asked to strengthen authentication in cases of suspected impersonation and confirm consistency between bank remitter names and crypto account holders. Beyond that, the agencies want exchanges to improve information sharing to detect fraud and unauthorized use, and to enhance information provision and collaboration with police.
Source: The Daily Hodl
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