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 shutting out of the international payment gateway SWIFT to the ruble tanking massively, companies may have tools at their disposal to evade the 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 head Satoshi Hasuo, president of Tokyo-based exchange Coincheck, stated that it would work with the Financial Services Agency to consider what specific measures are possible. At the same time, he referred to investigations being held to avoid any circumvention of the sanctions by 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 2nd, the US Justice Department announced the launch of a specialized team – KleptoCapture task force – to “target the crimes of Russian officials, government-aligned elites, and those who aid or conceal their unlawful conduct.”
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, the UK regulators are also pressuring crypto firms under their jurisdictions to ensure that economic sanctions against the country are enforced.
Written by: Chayanika Deka