Japan is considering tougher crypto regulations to bolster Russian sanctions.

Japanese authorities plan to introduce new, stricter rules for traders of crypto in order to prevent Russia from using cryptocurrencies to evade sanctions. The legislative decision comes after Tokyo at asked digital asset exchanges to increase transaction monitoring this month.

New regulations to prevent the Russian from evading sanctions

The Japanese authorities are about to strengthen regulations on cryptocurrency exchangeswith the aim of preventing the use of cryptocurrencies from Russia to circumvent international sanctions. The platforms will be required to check whether the recipients of the transactions are subject to financial sanctions imposed in response to Moscow’s decision to invade Ukraine.

According to Japan Todayciting government sources, the requirement will be introduced through changes to the country’s foreign exchange laws and trade laws. The amendment also seeks to deprive sanctioned individuals and entities of the ability to transfer crypto assets to third-party accounts.

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Russia is facing unprecedented sanctions that restrict its access to global financial markets and its reserves of exchange and gold. Reports indicate that Russian officials are interested in cryptocurrencies and are even ready to accept bitcoin for energy exports. Moscow’s support for legalizing cryptocurrencies is growing as lawmakers and pundits scramble to pass a comprehensive regulatory framework.

In early March, the Japanese government urged crypto-trading platforms to step up surveillance and asked them to notify financial authorities of any suspicious transactions that may violate sanctions. The Financial Services Agency (FSA) and the Japan Virtual and Crypto asset Exchange Association reportedly sought ways to prevent Russian entities from evading sanctions while excluding all Russian users from blocking.

Currently, Japanese law requires banks to check whether recipients of remittances are limitsbut cryptocurrency exchanges are not yet subject to this requirement. The Prime Minister Fumio Kishida announced on Monday that the government would prepare to introduce the corresponding amendments during this session of parliament.

Members of the crypto industry community reacted differently to the Ukrainian dispute. For example, major global platforms such as Binance and Kraken have rejected a request from the Ukrainian government to unilaterally freeze all Russian user accounts due to South Korean exchanges limiting access to Russians.

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Japan is considering tougher crypto regulations to bolster Russian sanctions.

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