Japan to Evaluate How Russia Can Avoid Sanctions Using Crypto

The Japan Financial Services Agency and the Japan Virtual and Crypto Assets Exchange Association are evaluating ways to block crypto transactions on Japan’s sanctions list, according to the Japan time.

The news comes after an unnamed official spoke to local media following Russia’s invasion of Ukraine, which triggered widespread and sweeping sanctions against the Russian state and Russian interests.

Japan’s Finance Minister Shunichi Suzuki also addressed the issue during a speech to parliament earlier today.

“We are closely monitoring the status of regulations such as crypto assets and SPFS to ensure the effectiveness of sanctions against Russia,” Suzuki reportedly said, referring to Russia’s “Financial Message Transfer System”, a state equivalent. international SWIFT. system.

Japan joins the global action

Japan isn’t alone in fearing that Russia could evade sanctions by using crypto.

Earlier this week, the French Minister of Finance, Bruno le Maire, noted the European Union is “taking steps” to ensure that Russia does not escape sanctions by using cryptocurrencies.

Also this week, the U.S. Treasury announced new rules which relied on an existing executive order to crack down on restrictions against cryptocurrency transactions.

The new rules target “deceptive or structured transactions or transactions to circumvent United States sanctions, including through the use of digital currencies or assets or the use of physical assets.”

How can Russia use crypto to evade sanctions?

Russia could use cryptocurrencies to evade sanctions in several ways.

One of the biggest risks is Russia’s use of ransomware, an industry already well established in the country.

Recent On-chain analysis data found that almost 75% of total global ransomware revenue for 2021 was linked to Russian-affiliated sources.

Crane Hassold, former FBI agent and current director of threat intelligence at Abnormal Security, Recount Decrypt cryptocurrencies are the “main factor” driving the current ransomware landscape. “This basically allows the global ransomware payouts that we’ve seen previously to scale to some pretty crazy numbers.”

Russia’s other options include Bitcoin mining, an industry that President Putin has previously said Russia has a “competitive advantageand the use of non-compliant crypto exchanges – an option Russia has turned to before.

“We have already seen examples of crypto asset exchange services that have been complicit in enabling Russian-based criminals to launder large amounts of money…one was called SUEX,” David Carlisle said. , director of policy and regulatory affairs at blockchain analytics firm Elliptic during a recent online webinar.

In September 2021, the US Treasury’s Office of Foreign Assets Control (OFAC) SUEX sanctioned pursuant to Executive Order 13694, which authorized the imposition of sanctions on individuals and entities responsible for or complicit in cybercrime-related activities against United States interests.

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Japan to Evaluate How Russia Can Avoid Sanctions Using Crypto

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