Japan is planning to modify its crypto exchange laws to prevent any loopholes that Russia could use to escape the ongoing Western sanctions.
Japanese Prime Minister Fumio Kishida also demanded more efforts and collaboration with Western allies to speed up the amendment of the exchange laws to make it very difficult for Russians to use cryptocurrencies to evade sanctions.
Japan To Revise Its Foreign Trade Act
The government is preparing a bill to revise the Foreign Trade Act and Foreign Exchange Act for the legislature in its current session.
Although the details of the amendments have not been made open, a source close to the situation said the amendment is receiving serious attention from top government officials and there is an ongoing discussion about the bill.
Some stakeholders in the crypto industry believe that the amendments will focus on bringing crypto exchanges under the same law and jurisdiction as commercial banks. This move is also being considered in other jurisdictions, but for different reasons.
Senior economist at Mizuho Research and Technologies, Saisuke Sakai, commented on the implication of the review. He stated that the revision may allow the government to apply the bank law to the crypto sector, especially the crypto exchanges. It could give the government the authority to force crypto exchanges to scrutinize whether their clients are Russian sanction targets.
The Amended Law Seeks To Empower Crypto Exchanges
The preset economic sanctions against Russia place little obligations on crypto exchanges. While many Russian Oligarchs have had their assets and funds in banks seized, those with crypto assets on exchanges still have control over their crypto funds. But the amendment of the crypto exchange rule is likely going to change, allowing crypto exchanges to block any transactions involving Russians that are part of the sanctions.
Since the invasion, Japan has frozen the assets of 100 Russian firms and oligarchs. As the third-largest economy in the world behind the U.S. and China, Japan wants to use its economic power to ensure that the sanctions against Russia are very effective to force the country to end its invasion of Ukraine.
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