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Japanese authorities have asked crypto exchanges in the country to comply with sanctions against Russia and Belarus in repose to the military invasion in Ukraine, reported Reuters.
The country has asked the exchanges not to process crypto assets transactions that are subject to asset-freeze sanctions.
This move comes after Group of Seven (G7), in which Japan is a member country, expressed its concerns about Russian entities using cryptocurrencies as a loophole for evading financial sanctions imposed on the country.
G7 said that Western countries will impose costs on illicit Russian actors using digital assets to build and transfer their wealth’.
Japan’s financial service agency (FSA) and the Ministry of Finance said that the government will toughen its measures against the transfer of funds involving crypto assets that would breach sanctions.
The authorities said that unauthorised payments to sanctioned entities, including through crypto assets, are subject to punishment of up to three years in prison or $8,487.52 of fine.
A senior official at FSA told the news agency: “We decided to make an announcement to keep the G7 momentum alive.
“The sooner the better.”
Japan is said to house 31 crypto exchanges as of March 2021.
Last week, the US Treasury Department issued new guidance that restricts crypto exchanges in the country from carrying out transactions against sanctions target.
Earlier this month, US crypto exchange Coinbase blocked over 25,000 wallet addresses tied to Russian individuals or entities suspected of illicit conduct.
Majority of the blocked addresses were identified via international investigations before the Ukraine crisis.
Previously, a report by Reuters said that digital currency exchange Binance stopped accepting cards of Russian banks that fell under sanctions.