Following concerns from the Group of Seven (G7) nations, Japan has requested crypto exchanges to cancel transactions of crypto assets that are subject to asset-freeze sanctions against Russia and Belarus, Reuters reported citing national officials.
Concerns among the G7 economies have been growing as they believe that the Russian government is using cryptocurrencies to tackle financial sanctions imposed upon the country for invading Ukraine.
Last Friday, the G7 released a statement saying Western nations “will impose costs on illicit Russian actors using digital assets to enhance and transfer their wealth.”
Currently, there are 31 crypto exchanges in Japan, according to an industry association.
According to Reuters, Japan’s request also came following the issuance of new guidance by the US Treasury Department that has asked US-based cryptocurrency firms to stop transactions with sanction targets.
“We decided to make an announcement to keep the G7 momentum alive,” said a senior official at Japan’s Financial Services Agency (FSA). “The sooner the better.”
In a joint statement, Japan’s FSA and the Ministry of Finance said that strong measures will be imposed against the transfer of funds using crypto assets that would be in violation of the sanctions.
The FSA further added that illegal payments to sanctioned targets will be punished with three years prison sentences or a 1 million yen ($8,487.52) fine. Payments under surveillance also include crypto assets – such as cryptocurrency and non-fungible tokens – the FSA added.
Russia has seen the further suspension of payment methods due to its war with Ukraine.
According to a March 7, 2022, report by Blockchain.News, more payment operators have followed the orders of sanctions issued by the U.S.
American Express, Visa, Mastercard, and PayPal have announced the suspension of their operations in Russia in protest of the country’s ongoing invasion of Ukraine.
The report added that four operators stated that cards issued by them would no longer function at shops or ATMs in Russia and that also means customers will no longer be able to use their Russian cards abroad or for international payments.
Another report by Blockchain.News stated that Coinbase CEO Brian Armstrong believes cryptocurrencies are emerging as the lifeline for Russians as the nation faces heavy sanctions.
Armstrong was quoted as saying: “some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them likely oppose what their country is doing, and a ban would hurt them, too. That said, if the US government decides to impose a ban, we will of course follow those laws.”
Armstrong also pointed out that banning Russians from using crypto exchanges is not possible as the law does not warrant it. He said that Coinbase is “not preemptively banning all Russians from using Coinbase. We believe everyone deserves access to basic financial services unless the law says otherwise.”
The war has caused panic among Russians and Ukrainians who are using crypto to shield their money.
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