Japan urges cryptocurrencies to impose sanctions on Russia

The Japanese government will strengthen measures against the transfer of funds using cryptocurrencies.

Tokyo: Japanese authorities on Monday ordered that cryptocurrency exchanges not be processed in cryptocurrency exchanges subject to sanctions for freezing assets against Russia and Belarus over the Ukrainian war.

Following a statement from the Group of Seven (G7) on Friday, Western nations “will impose costs on illegal Russian actors using digital assets to enhance and transfer their wealth.”

There is growing concern among the G7’s advanced economies that Russian entities are using cryptocurrencies as a loophole in the country’s financial sanctions for invading Ukraine.

The U.S. Treasury Department issued new guidelines on Friday urging U.S.-based cryptocurrency companies not to transact with criminal purposes.

“We decided to make a forecast to keep the G7 momentum alive,” said a senior official at the Japan Financial Services Agency. “The sooner the better.”

The Japanese government will step up measures against the transfer of funds using cryptocurrency assets that would violate sanctions, the FSA and the finance ministry said in a joint statement.

Japan has backtracked on global change between financial regulators by imposing stricter rules on private digital currencies, while the rich G7 powers and the 20-power Group have called for the regulation of “stable currencies”.

Unauthorized payments for punishable purposes, including through cryptocurrencies, could result in a three-year prison sentence or a fine of one million yen ($ 8,487.52), the FSA said Monday.

There were 31 cryptocurrencies in Japan on March 4, according to an industry association.

Global regulators remain concerned about the security of the new market for investors, given the rise in popularity it has had. The U.S. Securities and Exchange Commission has cited the potential for market manipulation as one of the main reasons for the exclusion of various applications for bitcoin exchange traded funds.

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