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Japan Urges Cryptocurrency Exchanges to Cooperate in Sanctions Against Russia

On Monday, Japanese authorities directed cryptocurrency exchanges not to conduct transactions containing crypto assets subject to asset-freeze penalties imposed on Russia and Belarus as a result of the Ukraine conflict.

Concerns about Russians on the sanctions list using cryptocurrency to evade sanctions were highlighted by G7 members. New guidelines from the U.S. Treasury indicated that sanctions cover cryptocurrencies as well.

Paying those sanctioned without authorization will result in a jail sentence of up to three years or a fine of one million yen ($8,500). As a payment method, non-fungible tokens may also be included among the options.

The G7 advanced countries are increasingly concerned that Russian firms are using cryptocurrency to circumvent financial restrictions imposed on the nation for invading Ukraine.

Japan is in action

The Japanese government has increased steps to prevent funds from being transferred via crypto assets, which would breach penalties, according to a joint statement issued by the FSA and the Ministry of Finance.

Japan has lagged behind a worldwide movement among financial authorities in enacting stronger restrictions on private digital currencies, despite the fact that the G7 affluent nations and the Group of 20 powerhouses have all urged stricter regulation of “stablecoins.”

With Japan’s latest campaign, anyone who makes illicit payments to persons targeted by sanctions risks up to three years in jail or a fine of 1 million yen ($8,500). Non-fungible tokens are also accepted as payment.

Many crypto exchanges and companies are following orders

In the middle of the crisis between Ukraine and Russia, cryptocurrency has become a hot issue. While contributions have poured in, governments are concerned that cryptocurrency may provide a route out for people who have been sanctioned. The EU has now expanded the penalties to cover digital assets.

Most have either completely ceased operations, such as Trezor, or given a compromise, such as Binance, which has suspended the accounts of people on the sanctions list.

Ukraine’s leaders have advised such corporations not to impose any limitations or face public backlash. Decentralization, according to these firms, is not in their best interests.

Meanwhile, Coinbase has said that technology in the crypto business might be utilized to assure sanction compliance. 25,000 wallets affiliated with Russians have been frozen by one of the world’s major exchanges.