Sanctions from the West have been hitting Russia’s economy hard. But Japan’s financial regulator and the country’s industry body for cryptocurrencies is now looking to ensure that these sanctions are carried out effectively. It aims to do so by plugging loopholes and restricting the transfer of digital assets of individuals and entities on the nation’s sanctions list.
Crackdown on Russian cryptocurrency transactions
From the shutdown of the SWIFT international payment gateway to the massive drop in the rouble, businesses may have tools to evade restrictions by leveraging digital assets.
In a bid to mitigate these loopholes, discussions are being held by the Financial Services Agency and the Japan Virtual and Crypto Assets Exchange Association. The officials reportedly stated that the debates do not involve any proposal to cease access for all Russian clients.
Japanese Finance Minister Shunichi Suzuki said:
“We are closely watching the situations of settlements such as crypto assets and SPFS in order to secure the effectiveness of sanctions against Russia.”
JVCEA director Satoshi Hasuo, chairman of the Tokyo-based exchange Coincheck, said he would work with the Financial Services Agency to examine what specific measures are possible. At the same time, he referred to ongoing investigations to avoid any circumvention of sanctions through the use of cryptocurrency assets.
The exec also weighted in on possible options to consider, such as – stopping bank transactions with Russian (cryptocurrency) miners and freezing digital assets held by government figures through exchanges in Japan.
Steps to target Russian attempts to dodge sanctions
On March 2, the US Department of Justice announced the launch of a specialized team – the KleptoCapture Task Force – to “target the crimes of Russian officials, government-aligned elites and those who aid or conceal their conduct illegal”.
The goal of the task force is to isolate Russia and seize the assets of organizations and individuals in violation of the sanctions. The investigative process will include blockchain data analytics, tracing, foreign intelligence platforms, etc.
Meanwhile, UK regulators are also pressuring crypto firms under their jurisdiction to ensure economic sanctions against the country are enforced.
Despite escalating tensions between Russia and Ukraine, top cryptocurrency exchanges, including – Coinbase, Binance, and Kraken – have no intention to halt servicing Russian-based clients.
