On Friday, Japan joined its G7 members in helping to enforce sanctions against Russia, with the country’s financial regulator and industry body for cryptocurrencies joining forces.
The Financial Services Agency and Japan’s Virtual Crypto Assets Exchange Association (JVCEA) are exploring ways to effectively block the transfers of crypto assets for any person or entity listed on the nation’s sanctions list, according to a regulatory official in an interview with Japan Times.
While the official pointed out that the ongoing discussions do not currently involve any proposal that would cut off access for all Russian clients, one measure is considering suspending transactions with Russia.
“We are closely watching the situations of settlements such as crypto assets and SPFS in order to secure the effectiveness of sanctions against Russia,” said Japanese Finance Minister Shunichi Suzuki to parliament on Friday.
As a member of G7, Japan joins the U.S. along with other members in its efforts to impose additional sanctions on Russia in the wake of its unprovoked invasion of Ukraine.
Targeting Russian crypto use
Ensuring that Russia cannot use cryptocurrencies to avoid sanctions has become a top priority for Western authorities. Earlier this week, finance ministers from the European Union and the G7 said they were working to prevent Russia from using cryptocurrencies to avoid sanctions.
Although unwilling to release any details, German Finance Minister Christian Lindner acknowledged that cryptocurrencies were a priority:
“The problem is known and we are working on it,” Lindner said. “It’s about maximally isolating Russia at all levels,” and applying the “maximum ability to sanction — and that also includes crypto assets.”
‘KleptoCapture’ Task Force
Earlier this week, U.S. president Joe Biden and his administration launched the joint ‘KleptoCapture‘ Task Force with the U.S. Department of Justice (DOJ) to stifle Russia and its ongoing invasion of Ukraine. The Task Force includes financial crime experts from across several other federal law enforcement agencies. In addition to investigating and prosecuting violations of sanctions, the Task Force will also target the use of cryptocurrencies to evade restrictions or launder money.
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