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Japan instructs crypto firms to comply with sanctions on Russia

TL;DR

TL; DR Breakdown

  • Japanese government instruct crypto firms to obey Russia related sanction
  • Several Korean exchanges deny Russians IP addresses

On Monday, the Japanese government banned cryptocurrency exchanges from processing transactions involving crypto-assets subject to asset-freeze sanctions against Russia and Belarus over the Ukraine conflict.

The new order follows a statement on Friday by the Group of Seven (G7), which informed that Western nations “will impose costs on illicit Russian actors who use digital assets to profit and transfer their funds.”

The G7 groups of advanced economies are increasingly concerned that cryptocurrencies may be employed as a loophole by Russian organizations to skirt financial sanctions imposed against the country for its actions in Ukraine.

On Friday, the US Treasury Department issued new guidelines that US-based crypto firms avoid engaging with 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. “The sooner, the better.”

In a joint statement, the government and the country’s finance ministry said it would collaborate to strengthen measures against crypto assets that would be in violation of sanctions.

The Japanese Financial Services Agency (FSA) said on Monday that payments to targets under sanctions, including via cryptocurrency assets, are subject to a maximum sentence of three years in prison or a $1 million yen (US$8,487.52) fine.

There were 31 digital currency exchanges in Japan as of March 4, according to the country’s cryptocurrency association.

Russian crypto IP addresses are not allowed on several Korean exchanges

Exchanges in South Korea have already begun to ban Russian users. Cryptopolitan recently reported that Upbit, Gopax, Bithumb, and Korbit, the world’s biggest local exchanges by transaction volume, has begun to reject cryptocurrency withdrawals made from Russian addresses.

Gopax reported that it blocked 20 accounts belonging to Russian users and IP addresses from the country. Bithumb and Korbit were also not left behind, restricting Russian users from accessing digital currency services.

The governments of Ukraine and the United States were concerned that Russia may utilize digital currencies to evade sanctions and monetary limitations imposed on the countries as a result of their ongoing war with Ukraine. As a result, they requested several trading platforms, including Binance and Coinbase, to vet Russian users’ addresses.

Binance, Coinbase, and other trading platforms denied the call suggesting that it would be almost impossible to block all the Russian users; they stated that they would monitor and restrict Russian addresses in compliance with the sanction.

The former US President Hillary Clinton said that she was disappointed with the exchanges that refused to ban the Russian account and ended up blaming the US  government for not pressuring the exchanges.

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Dennis Mugambi

Dennis is a content writer with a deep understanding of the blockchain domain and cryptocurrency field. He infuses cold data with flair to make technology and finances mind-blowing. His reports both fascinate and awaken the readers.

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