Japan’s Financial Services Agency (FSA) has issued a stern warning to crypto firms in the country against facilitating transactions connected to Russian and Belarus entities or individuals, Reuters reported Monday.
Japan Warns Crypto Entities
In addition, those making unauthorized crypto (including NFTs) payments to countries, entities, and individuals under sanction risk three years imprisonment or will pay a monetary fine up to $8,488, the FSA warned.
The move follows a joint statement issued by Group of Seven (G7) countries on Friday to impose restrictive measures preventing Russians from evading international sanctions via crypto.
“We decided to make an announcement to keep the G7 momentum alive. The sooner the better,” a senior FSA official said.
The Group of Seven (G-7) is an intergovernmental organization consisting of seven countries including Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. They focus on issues like global economic problems, international security, and energy policy.
Japan’s financial regulator alongside the country’s Ministry of Finance also made a joint statement saying that the government will work together in setting up strong measures to tackle the use of crypto assets to bypass sanctions.
Russia Using Crypto to Evade Sanctions?
Since its invasion of Ukraine, Russia has continued to face financial sanctions from the United States, the United Kingdom, the European Union (EU), and others.
However, world leaders are still concerned that Russia could use crypto as a means to evade such sanctions due to the decentralized nature of cryptocurrencies.
Last month, European Central Bank (ECB) President Christine Lagarde called on the European Union to hasten MiCA regulations in order to prevent Russia from evading new sanctions.
Binance CZ: Crypto is Too Small for Russia
Meanwhile, CEO of Binance, Changpeng Zhao (CZ) disagreed with the government and regulators saying that Russia can use cryptocurrencies to evade sanctions. He noted that they should rather place more focus on financial institutions.
“The truth is, crypto is too small for Russia. Another reason Russia would not want to use crypto is that it is too traceable. And governments around the world are already very adept at tracking it,” CZ explained.
