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Japan to Tighten Crypto Rules for Preventing Sanctions Evasion

Apr 06, 2022

Japan Implement Stricter Crypto Rules in Order of Sanctions Evasion Prevention.

  • Legislation updates are initiated by the Russia-Ukraine war conflict.
  • In case crypto exchanges suspect unauthorized transactions, they are obliged to notify the FSA.

The government of Japan is to tighten rules on cryptocurrency exchanges, as the country announced intentions to update its Foreign Exchange and Foreign Trade Act.Chief Cabinet Secretary, Hokazu Matsuno, has stated that Japan will introduce a bill to revise the existing laws on the matter.

Such actions are taken in light of intentions to crack down on any loophole that allows sanctioned countries like Russia to evade sanctions through cryptos. The revision “presumably enables the government to apply the law to crypto-asset exchanges like banks and oblige them to scrutinize whether their clients are Russian sanction targets,” Saisuke Sakai, a Senior Economist at Mizuho Research and Technologies, told Reuters. It is important to bear in mind that Japan is one of the countries that have deployed financial sanctions against Russia due to the war in Ukraine. Actually, the country issued an act early this month to ask almost 30 crypto exchanges to ban transactions from sanctioned countries.

It has been stated in a joint announcement of Japan’s Ministry of Finance and Financial Services Agency that both authorities are planning to penalize cryptocurrency exchanges that are violating economic sanctions imposed against Russian Federation.

Cryptocurrency exchanges in the country are looking at up to three years of prison or a monetary fine of 1 million yen (almost $8,500) for facilitating unauthorized crypto transactions to sanctioned targets. Moreover, the above-mentioned exchanges have to report FSA in case of suspicious unauthorized cryptocurrency transfers involving sanctioned entities and/or individuals.

Due to the latter changes in legislation Japanese crypto exchanges will be required to conduct any verification on transaction and flag them in applicable cases, only when an order is suspected of being related to sanctioned businesses or private persons.

Due to the financial sanctions that were taken against Russia, the country is now forced to search for alternative payment systems and methods in regard of accessing international trade market.

We at Offshorelicense Ltd are closely looking out for the changes in legislation all over the globe that are taking place due to the current unstable situation in the world. We are always there to introduce the most applicable decisions for our clients and for those, who seek to take part in Crypto business we are delighted to offer Lithuanian Crypto License, which currently is the most popular option on the market.

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