Japan’s top financial regulator, the Financial Services Agency (FSA), and the Ministry of Finance have told domestic crypto exchanges to suspend all transactions with Russians and Belarusians who have been hit with international sanctions.
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Per Nikkei and Reuters, Tokyo is moving “in line with the United States and Europe,” in a bid to prevent crypto transactions “from becoming a loophole in economic and financial sanctions” placed on Russia and Belarus.
The FSA and the ministry have told trading platforms that in cases where transactions made via Japanese crypto exchanges are found to involve individuals who have been hit with sanctions must be rejected. Those that appear “suspicious” in this regard must also be rejected. Such transactions must also be reported to the FSA and the Ministry of Finance.
In a joint statement, the bodies also called for the increased monitoring of crypto transactions and asked exchanges to pay attention to sanctions lists published by the government.
On Friday last week, the G7 insisted that the international community would “impose costs on illicit Russian actors using digital assets to enhance and transfer their wealth.”
Reuters quoted an unnamed FSA “senior official” as stating:
“We decided to make an announcement to keep the G7 momentum alive. The sooner the better.”
However, Nikkei added that some sanctioned Russian customers may seek to get around such blocks by “using pseudonyms,” as well as other measures, and stated that the “effectiveness” of the suspension was “uncertain.”
Regardless, the Japanese Virtual Currency Exchange Association (JVCEA), the self-regulatory organization that comprises all of the nation’s registered crypto exchanges, is also planning to create a set of guidelines for its members – aimed at enforcing compliance with sanctions.
Nikkei reported that the body is set to hold talks with the FSA in a bid to ensure funds do not flow to and from Russians subject to sanctions via Japanese crypto-related firms.
Previously, all of South Korea’s biggest crypto exchanges have gone a step further – by banning all crypto transactions and account creation requests made from Russian IP addresses.
Meanwhile, it seems that the USDT stablecoin issuer Tether does not intend to do the same.
Last Friday, Ukraine Vice Prime Minister Mykhailo Fedorov asked Tether and its CTO Paolo Ardoino directly to “stop any transactions with the Russians! For peace!”
And while the company didn’t reply to Federov directly, per a statement cited by Bloomberg, they said that,
“Tether conducts constant market monitoring to ensure that there are no irregular movements or measures that might be in contravention of international sanctions.”
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