The Japanese government has asked crypto exchanges to abide by international sanctions on Russia. To do this, it has directed them not to perform transactions that are susceptible to Russian and Belarus sanctions. According to authorities, this compliance is in keeping with the latest G7 declaration, which seeks to increase pressure on Russia’s leadership to cease its invasion of Ukraine. The FSA further stated that improper payments to individuals sanctioned will be punished even if they are made with digital assets such as NFTs or cryptocurrency. This can result in a punishment of one million yen ($8,478.52) or three years in jail.
Global powers have expressed concern that Russian organisations and individuals may use cryptocurrency to avoid financial sanctions imposed in response to the Ukraine attacks. According to available data, billionaires in Belarus and Russia have shown a significant interest in cryptocurrency. While crypto exchanges may not be able to enable transactions for the entire country, Putin’s friends can still utilise crypto as a safe haven to avoid sanctions. However, the G7 group is determined to put a halt to this in order to ensure the efficacy of the penalties. According to a joint statement issued by Japan’s Ministry of Finance and Financial Services Agency (FSA), the government would seek to prohibit the use of crypto assets to move cash in violation of penalties.
Although the regulation does not prohibit Japanese cryptocurrency exchanges from enabling transactions with Russian-based wallets, it imposes stricter compliance standards on the country’s 31 exchanges.