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The
step was taken after a Group of Seven (G7) statement on Friday
that said Western nations "will impose costs on illicit Russian
actors using digital assets to enhance and transfer their
wealth."
There are growing concerns among G7 advanced economies that
cryptocurrencies are being used by Russian entities as a
loophole for financial sanctions imposed upon the country for
invading Ukraine.
The U.S. Treasury Department issued new guidance on Friday that
required U.S.-based cryptocurrency firms not to engage in
transactions with sanction targets.
"We decided to make an announcement to keep the G7 momentum
alive," said a senior official at Japan's Financial Services
Agency. "The sooner the better."
The Japanese government will strengthen measures against the
transfer of funds using crypto assets that would violate the
sanctions, the FSA and the Ministry of Finance said in a joint
statement.
Japan has lagged a global shift among financial regulators in
setting stricter rules on private digital currencies, while the
G7 rich powers and the Group of 20 powerhouses have all called
for greater regulation of "stablecoins".
Unauthorised payments to targets under sanctions, including
through crypto assets, are subject to punishment of up to three
years in prison or a 1 million yen ($8,487.52) fine, the FSA
said on Monday.
There were 31 crypto exchanges in Japan as of March 4, according
to an industry association.
Global regulators remain concerned about the safety of the new
market for investors, given its surge in popularity. The U.S.
Securities and Exchange Commission has cited the potential for
market manipulation as one of the primary reasons for rejecting
several applications for spot bitcoin exchange-traded funds.
($1 = 117.8200 yen)
(Reporting by Tetsushi Kajimoto, Daniel Leussink and Kantaro
Komiya; Editing by Jacqueline Wong and Sam Holmes)
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