Japan is going to end crypto loopholes for sanctions on Russia

Tokyo- Japan will revise its foreign exchange law to stop Russia from evading Western financial sanctions following Moscow’s invasion of Ukraine through cryptocurrency assets, top officials said on Monday.

Chief Cabinet Secretary Hirokazu Matsuno said in a press conference that the Government will submit a revision of the Foreign Trade and Foreign exchange act to the current parliament session to strengthen protection against potential sanctions-busting by Russia through digital assets.

In a Monday parliament session, Prime Minister Kishida also called for the law to be amended and he also stressed the need for coordinated moves with Western allies after attending the Group of Seven summit in Belgium.

Because of the invasion of Ukraine, the Japanese government has slapped asset freeze sanctions on more than 100 Russian officials, oligarchs, banks, and other institutions. Japan has banned high-tech exports and revoked the most-favored-nation trade status for Russia, which calls its action in Ukraine a ‘’Special military operation.’’

This month, Japan’s financial regulatory body ordered to stop 30 crypto exchanges in the country with sanction targets.

A legislative revision is a stronger step to execute such regulations. According to economist Sakai, Kishid’s government likely developed the legal revision plan given Western authorities stricter ruler on the subject, as well as high Japanese public support for sanctioning Russia.