Japanese authorities have asked crypto exchanges to comply with the sanctions imposed on Russia. To do this, she asked them not to process transactions subject to sanctions against Russia and Belarus.
Officials said the compliance is in line with the G7’s new announcement to put more pressure on the Russian government to end the invasion of Ukraine.
Japan urges crypto exchanges to obey sanction orders
There are growing fears among world powers that Russian entities and individuals may use crypto to avoid financial sanctions imposed following the Ukrainian attacks.
Available information shows that there has been increased interest in crypto from oligarchs in Belarus and Russia. The report claims that many are looking to liquidate their assets or acquire properties in the UAE via crypto.
While crypto exchanges may not have the capacity to facilitate necessary transactions for the entire country, Putin’s allies can still use crypto as a safe haven to evade sanctions.
But the G7 group is determined to put an end to it to guarantee the effectiveness of the sanctions. According to a statement issued jointly by the Japanese Ministry of Finance and the Financial Services Agency (FSA), the government will endeavor to prevent the transfer of funds in violation of sanctions using crypto assets.
The FSA added that unauthorized payments to sanctioned individuals, even with digital assets, whether NFT or crypto, will result in sanctions. This can be a fine of 1 million yen ($8,478.52) or 3 years imprisonment.
While the directive does not prohibit Japanese crypto exchanges from facilitating transactions with Russian-based wallets, it does impose higher compliance requirements on the country’s 31 exchanges.
US reiterates sanctions compliance measures
Japan is not the only country seeking to prevent the use of crypto to evade sanctions. The US Treasury Department’s Office of Foreign Assets Control (OFAC) also reiterated this.
Last week, it issued a guidance statement requiring US residents and digital asset companies to comply with sanctions when facilitating crypto transactions.
He said there is a need for vigilance among entities and individuals in the United States “against attempts to circumvent OFAC regulations.” They should therefore take “risk-based measures to ensure that they do not engage in prohibited transactions”.
The statement comes even though White House officials have said they don’t see Russia using crypto to completely evade sanctions. The Financial Crimes Enforcement Network (FinCEN) previously required all crypto exchanges to report suspicious transactions. But the OFAC guidelines take it up a notch.
Several crypto exchanges are already complying with the sanctions even though they refused to stop their operations in Russia. However, there are fears that global powers could possibly impose it on crypto exchanges if the conflict escalates.
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