The geopolitical tensions between Russia and Ukraine are far from cooling down anytime soon. Amidst the frazzled environment, the US, the EU, and other allies have escalated their economic pressure on Russia. Collectively, they intend to strip Moscow of its privileges.
In what is the latest development, Japan has now become the latest nation to urge its local firms to adhere to the sanctions imposed against Russia. On Monday, Japanese authorities ordered crypto exchanges not to process transactions involving crypto-assets subject to asset-freeze sanctions against Russia and Belarus owing to the ongoing war. A recent Reuters report brought to light the same.
Here it is important to note that the inter-governmental political forum G7, consisting of the US, UK, Canada, France, Germany, Italy, and Japan stripped Russia of ‘the most favored nation’ status on Friday. In fact, their statement released on the same day highlighted that Western nations “will impose costs on illicit Russian actors using digital assets to enhance and transfer their wealth.”
A senior official at Japan’s Financial Services Agency said,
“We decided to make an announcement to keep the G7 momentum alive. The sooner the better.”
As per Reuters, the Japanese government will strengthen measures against the transfer of funds using crypto assets that would violate the sanctions, the FSA and the Ministry of Finance said in a joint statement.
The penalties
Unauthorized payments to targets under sanctions, including through crypto assets, are subject to punishment of up to three years in prison or a 1 million yen ($8,487.52) fine, per the FSA. According to an industry association, there were 31 crypto exchanges in Japan as of the beginning of the month.
It is a known fact that there are growing concerns amongst nations across the globe that cryptos are being used by Russian entities as a loophole for financial sanctions imposed upon the country for invading Ukraine. In such a scenario, Japan’s latest order comes as no surprise.