US officials urge Japanese crypto exchanges to sever relations with Russia

Previously, the FSA and Japan’s Finance Ministry advised crypto businesses against processing transactions featuring sanctioned persons or organisations, which might result in penalties or jail time.

According to reports, government representatives from the United States have encouraged Japan’s regulated cryptocurrency exchanges to cease doing business with Russia, ostensibly as part of the country’s economic sanctions.

The Financial Times reported on Thursday that U.S. officials urged that many of the 31 crypto exchanges allowed to operate in Japan and certain miners cease operations in Russia. According to reports, Japan’s financial watchdog, the Financial Services Agency or FSA, demanded that the respective exchanges break any remaining relations with Russia.

Following Russia’s invasion of Ukraine in February, cryptocurrencies have become a topic of controversy for many politicians and authorities in jurisdictions placing sanctions on Russia. In March, the FSA and Japan’s Ministry of Finance declared that crypto companies conducting transactions involving sanctioned people or businesses in Russia and Belarus would be susceptible to significant penalties or jail.

Since February, under the leadership of Prime Minister Kishida Fumio, Japan has implemented its own sanctions on Russia, including a restriction on imports of the country’s gold and the freezing of Russian assets. According to a story in the Financial Times, despite the fact that many Japanese crypto mining businesses and exchanges may not operate directly in Russia, they may have subsidiaries working with Russian corporations in breach of sanctions.

To provide crypto-related services in Japan, all exchanges must be registered in accordance with FSA regulations. There were 31 registered and approved exchanges in the nation as of June 17, including DeCurret, bitFlyer, Coincheck, and OKCoin.

Former Japanese Prime Minister Shinzo Abe was shot and died during a campaign event in Nara on Friday. Abe was famous for his planned economic changes, which became known as “Abenomics.”