Lawmakers in Japan have requested cryptocurrency exchanges not to deal with transactions linked to Russia and Belarus. Those making unauthorized payments in crypto to those countries will face up to three years in prison or a fine of $8,500.
Lawmakers in Japan called on their country’s digital currency exchanges to have a more cooperative stance regarding the sanctions applied against Russia. The request arrived as governments became more interested in how digital assets can help avoid sanctions.
The Japanese government specifically demanded cryptocurrency exchanges to play a more significant role in the punitive actions taken against Russia for its attacks over Ukraine. Reuters reported that the government asked crypto exchanges not to deal with cryptocurrency transactions for Russia and Belarus, in harmony with the package of economic punishments.
The request arrived after a meeting held by G7 members, who awoken concerns that Russians on the sanctions list could apply digital assets as a tool to circumvent the impact of economic sanctions over their finances.
The request specifically highlighted that the member nations of the Group of 7 would apply costs on illicit Russian actors who use crypto to save and transfer their wealth. The US Treasury also launched new guidance assuring that the sanctions included digital currencies.
Along with Japan’s new measures, those who make unauthorized payments to the individuals or entities targeted by the sanctions will have to deal with a prison term of up to three years or a fine valued at 1 million yen, about 8,500 US dollars. It is worth noting that non-fungible tokens, NFTs, were also considered a payment method.
Crypto and Sanctions over Russia
Cryptocurrencies became a hot topic amid Russia’s invasion of Ukraine, with many administrations worried about how crypto might become a way out for the Russians.
The exchanges reacted to the requests initially made by Ukrainian authorities. Notably, Kraken exchange CEO Jesse Powell said he would need a solid legal reason to carry out this procedure.
However, other networks suspended the service altogether; one of these platforms was Trezor. In the case of Binance, the company released a statement saying that they are applying the same sanctions rules as banks according to international agreements.
For its part, Coinbase said technology in the crypto industry could serve as a tool to ensure more effective sanctions compliance. In illicit acts, it has already suspended at least 25,000 wallets linked to Russians.
Coinbase explained that it maintains an improved Blockchain analytics protocol to identify high-risk behavior and focus on studying every emerging threat; it also develops new mitigations. It means that Coinbase focuses on mapping transactions beyond the entities and individuals targeted by governments.
By: Jenson Nuñez
