Japan Considers Stricter Crypto Regulations in Light of Russia Sanctions

04 Apr 2022 By: Rohit Khandelwal
Japan Considers Stri

Authorities in Japan are planning tointroduce tougher new rules for 

Crypto operators as part of efforts to preventRussia from using cryptocurrencies to evade sanction

The legislativeinitiative comes after Tokyo asked digital asset exchanges to strengthentransactions monitoring this month.

Amid concerns that Russiaand its elites may employ cryptocurrencies to circumvent internationalsanctions, Japanese authorities are going to stiffen regulations forcryptocurrency exchanges. The platforms will be required to verify ifrecipients of transactions are subject to financial sanctions imposed inresponse to Moscow’s decision to invade Ukraine.

To obligation will beintroduced through amendments to the country’s foreign exchange and trade law,according to government sources quoted by Japan Today. The revision aims toalso deprive sanctioned individuals and entities of opportunities to transfercrypto assets to a third party account, the publication detailed.

Russia is facingunprecedented penalties that have restricted its access to the global financialmarket and its reserves in foreign currency and gold. Reports have revealedthat Russian officials are interested in cryptocurrencies and are even ready toaccept bitcoin for energy exports. Support for the legalization ofcryptocurrencies is growing in Moscow while lawmakers and experts are workingto adopt a comprehensive regulatory framework.

Earlier in March, theJapanese government urged crypto trading platforms to boost monitoring andasked them to inform financial authorities of any suspicious transactions thatmay breach sanctions. The Financial Services Agency (FSA) and the Japan Virtualand Crypto Assets Exchange Association have been reportedly looking for ways tostop Russian entities from circumventing sanctions while ruling out theblocking of all Russian users.

Reactions to the conflict in Ukraine have varied amongmembers of the crypto industry. For example, while South Korean exchangesrestricted Russians’ access, major global platforms like Binance and Krakendenied a request by the Ukrainian government to unilaterally freeze theaccounts of all Russian users.