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.
