Hokazu Matsuno, Japan’s Chief Cabinet Secretary, announced that the government will introduce legislation to revise existing laws on the subject. The country announced plans to amend its Foreign Exchange and Foreign Trade Act, which will result in stiffer regulations for cryptocurrency exchanges. The amendment seeks to prevent Russia from circumventing Western financial sanctions following Moscow’s invasion of Ukraine by using digital assets.
Japan’s recently elected prime minister, Fumio Kishida, also backed the proposed changes and asked for concerted efforts with Western partners to implement the new regulations.
Under the amended foreign exchange legislation, crypto exchanges, like banks, will be compelled to check and flag transactions connected with sanctioned Russian persons or entities.
Both Japan’s Financial Services Agency (FSA) and Ministry of Finance announced plans to penalize cryptocurrency exchanges that violate Russia’s economic sanctions.
Japan, like the majority of its Western partners, imposed some economic sanctions on Russia in response to the country’s actions in Ukraine.
Earlier this month, the country’s financial regulatory office also asked cryptocurrency exchanges to stop processing transactions for sanctioned individuals.
On Monday, 28th March, Japan’s Prime Minister, Fumio Kishida, stated that to strengthen sanctions against Russia, the government must pass an amendment to close what it regards to be a crypto loophole.
According to Kyodo News, Russia’s Foreign Ministry announced earlier this month that it would suspend peace talks with Japan, which some perceived as a knee-jerk reaction to Japan’s sanctions against Moscow for its Ukrainian invasion. Russia’s military campaign has been widely condemned by Tokyo.
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