On Monday, Japanese authorities ordered cryptocurrency exchanges not to conduct transactions involving crypto assets that are subject to asset-freeze penalties imposed on Russia and Belarus due to the Ukraine conflict.
When did the move come into action?
The move came after the Group of Seven (G7) statement on Friday, which stated that “illicit Russian actors utilizing digital assets to enhance and transfer their wealth would face repercussions.”
Russian firms are exploiting cryptocurrencies as a backdoor for financial sanctions imposed on the country for invading Ukraine, according to G7 advanced economies.
US Treasury Department publishment
On Friday, the US Treasury Department published new instructions requiring bitcoin firms operating in the United States to refrain from transacting with sanctioned countries.
“We decided to announce to maintain the G7 momentum,” a senior official from Japan’s Financial Services Agency said. “The sooner the better,” says the narrator.
According to a joint statement from the FSA and the Ministry of Finance, the Japanese government would increase efforts against the transfer of cash using crypto assets that would breach penalties.
Japan authorities on private digital currencies
While the G7 affluent countries and the Group of 20 powerhouses have all urged for more regulation of “stablecoins,” Japan has laggard a global shift among financial authorities in enacting stronger limits on private digital currencies.
Unauthorized payments to sanctioned targets, including through crypto assets, are punishable by up to three years in prison or a fine of one million yen ($8,487.52), according to the FSA.
According to an industry association, there were 31 crypto exchanges in Japan as of March 4. Given the new market’s prominence, global regulators are concerned about its safety for investors. The US Securities and Exchange Commission has rejected multiple applications for spot bitcoin exchange-traded funds, citing the risk of market manipulation as one of the main reasons.