On Monday, Japanese authorities ordered cryptocurrency exchanges not to conduct transactions involving crypto assets subject to asset-freeze penalties imposed on Russia and Belarus as a result of the Ukraine conflict.
The action was made in response to a statement issued by the G7 on Friday, which stated that Western nations "would impose costs on illegal Russian actors utilising digital assets to increase and transfer their riches." G7 advanced economies are increasingly concerned that Russian firms are using cryptocurrency to circumvent financial restrictions imposed on the nation for invading Ukraine.
On Friday, the US Treasury Department issued new instructions requiring US-based cryptocurrency businesses not to participate in transactions with sanction targets.
The Japanese government will increase steps to prevent cash from being transferred via crypto assets, which would breach penalties, according to a joint statement issued by the FSA and the Ministry of Finance. Unauthorized payments to sanctioned targets, including through crypto assets, are punishable by up to three years in jail or a 1 million yen ($8,487.52) fine, according to the FSA on Monday.
Given the new market's prominence, global regulators are concerned about its safety for investors. One of the key concerns given by the Securities and Exchange Commission is the possibility of market manipulation.