Crypto: Japan to restrict Russia circumventing sanctions; revise foreign exchange laws

Sahana Kiran
Source – Unsplash

The Russia-Ukraine war has got countries from across the globe taking sides. Japan cleared its stance and pointed out that it was against Russia with its latest law on foreign exchange. With this, the Japanese government intends to deter the possibility of Russians working around sanctions.

As Ukrainians were fighting for their lives and homes in what is considered the third world war, governments were expressing fear over Russians. Crypto seemed to be playing a prominent role in the war. It provided maximum aid to the war-torn country in the form of donations. Another reason why crypto was dragged into this was due to leaders voicing their concerns over Russians using crypto to evade sanctions. Japan was one among them.

Earlier this month, Japan made news after it urged its local crypto firms to comply with the sanctions imposed against Russia. Today, however, Chief Cabinet Secretary Hirokazu Matsuno stated that the country would be revising its foreign exchange law. This revision was solely curated to forbid Russians from circumventing sanctions.

The details pertaining to the amendment are still under the wraps. But, a senior economist at Mizuho Research and Technologies, Saisuke Sakai speculated the revision,

“presumably enables the government to apply the law to crypto-asset exchanges like banks and oblige them to scrutinize whether their clients are Russian sanction targets.”

Furthermore, Prime Minister Fumio Kishida stressed the need for collaborating with its Western allies to make the law work. The inter-governmental political forum G7 is likely to be summoned for a meeting about the same.

Japan’s sanctions against Russia

An array of countries have been keeping an eye on crypto exchanges. World leaders are adamant about financially handicapping Russia. Therefore, Japanese authorities recently ordered crypto exchanges to stop processing crypto transactions, particularly of those in the Russian sanctions list.

Exchanges that fail to comply with these laws could land in prison for up to three years or be slapped with a 1 million yen [$8,487.52] fine.