Japan to Fine Crypto Exchanges for Violating Russia Sanctions

Monday, 14/03/2022 | 13:07 GMT by Arnab Shome
  • The exchange executives might face prison time for non-compliance.
  • But, crypto exchanges around the world are divided on banning Russian addresses.
liquid, ftx

Japan’s Financial Services Agency (FSA) and Ministry of Finance have jointly announced on Monday that they have laid out a plan to penalize cryptocurrency exchanges who are violating economic sanctions imposed against Russia.

As reported by Forkast, cryptocurrency exchanges in the country are looking at up to three years of a prison sentence or a monetary fine of 1 million yen (almost $8,500) for facilitating unauthorized crypto transactions to sanctioned targets.

Further, crypto exchanges need to report to the FSA if they suspect any unauthorized cryptocurrency transfers involving the sanctioned entities or individuals.

Enforcing Sanctions

Japan’s move came as the G7 countries, which are Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, are imposing strict economic sanctions on Russia following its invasion of Ukraine.

The Western governments have sanctioned several financial institutions and other companies and even froze the assets of several Russian billionaires and politicians, including President Vladimir Putin himself.

Meanwhile, the foreign regulators are cautious that Russia might be trying to circumvent the sanctions using cryptocurrencies. But, it is not possible to run an economy like Russia with cryptocurrencies and also, no hard evidence of the use of cryptocurrencies has been found yet.

Though the regulators are taking major steps to seal all possibilities of using cryptocurrencies by sanctioned Russians, crypto exchanges are divided on the matter.

South Korean crypto exchanges have already blocked all Russian account addresses, but other major exchanges are not in agreement with this. Coinbase, Binance and Kraken have already confirmed that they will not remove Russia-linked addresses, while Crypto.com added Russian as a supported language on March 3.

Meanwhile, Ukraine has received hundreds of millions in donations in cryptocurrencies for the relief of its citizens affected by the conflict.

Japan’s Financial Services Agency (FSA) and Ministry of Finance have jointly announced on Monday that they have laid out a plan to penalize cryptocurrency exchanges who are violating economic sanctions imposed against Russia.

As reported by Forkast, cryptocurrency exchanges in the country are looking at up to three years of a prison sentence or a monetary fine of 1 million yen (almost $8,500) for facilitating unauthorized crypto transactions to sanctioned targets.

Further, crypto exchanges need to report to the FSA if they suspect any unauthorized cryptocurrency transfers involving the sanctioned entities or individuals.

Enforcing Sanctions

Japan’s move came as the G7 countries, which are Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, are imposing strict economic sanctions on Russia following its invasion of Ukraine.

The Western governments have sanctioned several financial institutions and other companies and even froze the assets of several Russian billionaires and politicians, including President Vladimir Putin himself.

Meanwhile, the foreign regulators are cautious that Russia might be trying to circumvent the sanctions using cryptocurrencies. But, it is not possible to run an economy like Russia with cryptocurrencies and also, no hard evidence of the use of cryptocurrencies has been found yet.

Though the regulators are taking major steps to seal all possibilities of using cryptocurrencies by sanctioned Russians, crypto exchanges are divided on the matter.

South Korean crypto exchanges have already blocked all Russian account addresses, but other major exchanges are not in agreement with this. Coinbase, Binance and Kraken have already confirmed that they will not remove Russia-linked addresses, while Crypto.com added Russian as a supported language on March 3.

Meanwhile, Ukraine has received hundreds of millions in donations in cryptocurrencies for the relief of its citizens affected by the conflict.

About the Author: Arnab Shome
Arnab Shome
  • 6365 Articles
  • 80 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6365 Articles
  • 80 Followers

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