Japan urges crypto firms to follow sanctions against Russia

March 15, 2022

By Priyanka Shetty

Japanese authorities mandated crypto exchanges not to process transactions involving crypto-assets subject to asset-freeze sanctions against Russia.

Here’s what we know:

  • According to officials, this compliance is in line with the new G7 announcement seeking to put more pressure on the Russian government to end the invasion of Ukraine. G7 advanced economies are worried that cryptocurrencies are being used by Russian entities to evade imposed sanctions.
  • Japan isn’t the only country seeking to prevent the use of crypto to evade sanctions. The U.S. Treasury Department issued new guidance on Friday that required U.S.-based cryptocurrency firms not to engage in transactions with sanction targets.
  • The new guidance comes shortly after U.S. Sen. Elizabeth Warren (D-Mass.) announced she was drafting a bill to prevent Russian oligarchs or President Vladimir Putin from using crypto to evade sanctions.
  • The Japanese government will strengthen measures against the transfer of funds using crypto assets that would violate the sanctions, the FSA and the Ministry of Finance said in a joint statement.
  • Unauthorized payments to targets under sanctions, including through crypto assets, are subject to punishment of up to three years in prison or a 1 million yen ($8,487.52) fine, the FSA said.
  • Although the directive doesn’t ban Japanese crypto exchanges from facilitating transactions with Russian-based wallets, it puts higher compliance requirements on the 31 exchanges in the country.

 


About the author

Based in Bengaluru, Priyanka Shetty is a freelance writer for Blockchain Asset Review.

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