Japan has a long history of fostering cryptocurrency and blockchain startups, but with the country’s recent sanctions against Russia it is now mandating that companies in its jurisdiction must comply. The new law will make it more difficult for Russian-based crypto firms to operate within Japan and can also lead to some negative consequences for those who don’t comply.
Japan has been encouraging crypto companies to comply with sanctions against Russia. This is a move that was made by the Japanese government because they want to promote their own cryptocurrency and blockchain technology. Read more in detail here: is cryptocurrency legal.
On March 14, Japanese authorities instructed cryptocurrency exchanges not to conduct transactions involving crypto-assets that are subject to asset-freeze penalties imposed on Belarus and Russia as a result of the Ukraine conflict.
This action was taken in response to a statement issued by the Group of Seven (G7) on March 11 that stated:
“Illicit Russian actors who use digital assets to improve and transfer their fortunes will face consequences.”
Cryptos are being utilized by Russian firms as a backdoor for several financial penalties placed on the country for invading Ukraine, according to G7 advanced economies. On March 11, the US Treasury Department issued fresh instructions requiring US-based crypto firms to refrain from transacting with sanctioned parties.
According to a top official of Japan’s Financial Services Agency,
“In order to keep the G7 enthusiasm going, we decided to make an announcement.” “The sooner you get started, the better.”
According to a joint statement from the FSA and the Ministry of Finance, the Japanese government would strengthen efforts against the transfer of money using cryptocurrency assets that may breach penalties. While the G7 affluent countries and the Group 20 powerhouses have all endorsed more regulation of’stablecoins,’ Japan has fallen behind a worldwide trend among financial authorities in enacting tougher limits on private digital currencies.
The FSA said on March 14 that illegal payments to sanctioned targets, including through crypto assets, may result in a three-year jail sentence or a fine of one million yen ($8,487.52), according to the FSA. According to an industry group, there were 31 crypto exchanges in Japan as of March 4.
Given its growing popularity, global authorities are concerned about the new market’s safety for investors. The danger of market manipulation has now been identified by the Securities and Exchange Commission as one of the main grounds for the rejection of several applications for spot bitcoin exchange-traded funds.
