Author: CoinPost
According to a report by Japanese cryptocurrency media CoinPost, the Financial Services Agency (FSA) of Japan, in collaboration with the National Police Agency, officially requested the Japan Virtual and Crypto assets Exchange Association (JVCEA) to strengthen its efforts in preventing virtual currency fraud cases on August 6th.
Content of the New Anti-Fraud Measures
On the 6th, the FSA, jointly with the National Police Agency, submitted a request to the JVCEA, proposing 11 new regulations covering areas such as a withdrawal address pre-registration system and enhanced transaction monitoring. All exchanges, regardless of their size, are subject to these new requirements.
The push behind this move is the persistent rise in cases of investment solicitation scams and "pig butchering" romance scams conducted through social media platforms. Although financial institutions have long taken countermeasures, fraudulent tactics have become increasingly sophisticated and complex, with cases even emerging where illicit funds flow directly into exchange accounts.
Dual Approach: Identity Verification and Withdrawal Restrictions
The new regulations require exchanges to establish more robust mechanisms to verify the authenticity of identity documents submitted during account opening and to clearly inform users that buying or selling accounts is illegal. Furthermore, users will have their withdrawals restricted for a certain period after completing a fiat deposit or purchasing virtual currency.
Regarding withdrawal addresses, the FSA demands the introduction of a pre-registration system: newly registered withdrawal addresses must first be checked for any association with fraud cases before a restricted period is set. Additionally, exchanges must set withdrawal limits based on user risk assessment results and transaction purposes, and any increase in limits must be handled with extra caution.
Enhanced Transaction Monitoring and Closer Cooperation with Police
In terms of transaction monitoring, the new rules require exchanges to promptly adjust their detection strategies in response to the recent high-frequency fraud methods, strengthening the identification of anomalous transactions inconsistent with account purposes. Once suspicious transactions are detected, measures such as restricting transactions or freezing accounts must be taken immediately.
Other requirements include: mandating multi-factor authentication when identity impersonation is suspected, verifying the consistency between the remitter's name and the account holder's real name, among others. The FSA also requires exchanges to establish rapid information-sharing and collaboration mechanisms with local police authorities. For projects that require system modifications and are difficult to implement in the short term, the FSA stated that phased implementation according to plan is acceptable.
