Japan's Financial Services Agency (FSA) and the Ministry of Finance jointly announced Monday that they have devised a plan to sanction cryptocurrency trading platforms that violate economic sanctions against Russia.
According to Forkast, cryptocurrency exchanges in the country will face up to three years in prison or a fine of 1 million yen (about $8,500) for facilitating unauthorized crypto transactions for sanctioned purposes.
Additionally, cryptocurrency exchanges need to notify the Japan Financial Services Authority if they suspect any unauthorized transfers of cryptocurrency involving sanctioned individuals or entities.
Imposing sanctions on Russia and banning it from using crypto:
Japan's move came as the Group of Seven nations, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, imposed severe economic sanctions on Russia in the wake of its invasion of Ukraine.
Western governments have imposed sanctions on many financial institutions and other companies and even frozen the assets of many Russian billionaires and politicians, including President Vladimir Putin himself.
Meanwhile, foreign regulators are wary that Russia may try to circumvent sanctions using cryptocurrencies.
However, it is not possible to manage an economy like Russia with cryptocurrencies and also no strong evidence of cryptocurrency has been found so far.
Although regulators are taking major steps to shut down all possibilities of cryptocurrency being used by sanctioned Russians, crypto exchanges are divided on the issue.
South Korean cryptocurrency exchanges have already banned all Russian account addresses, but other major exchanges disagree.
Coinbase, Binance, and Kraken have already confirmed that they will not remove addresses linked to Russia, while Crypto.com added Russian as a supported language on March 3.
Meanwhile, Ukraine has received hundreds of millions of cryptocurrency donations to bring relief to its citizens affected by the ongoing conflict and war.
