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With the U.S. and the EU taking steps to prevent Russia from circumventing cryptocurrency sanctions, many Asian countries have also taken action in response to the situation.
Japan fines cryptocurrency exchanges for sanctions violations
Japan is the latest country in Asia to call on cryptocurrency companies to comply with sanctions against Russia. On Monday, the country asked not to process cryptocurrency transactions involving sanctioned individuals or entities in Russia and Belarus.
The Japan Financial Services Company (FSA) and the Ministry of Finance issued statements on sanctions against Russia, stressing that cryptocurrencies are part of the restrictions and that any crypto assets related to the sanctions must be frozen.
The FSA reports that any invalid transactions under sanctions, including cryptocurrency transfers or NFT, are subject to penalties such as imprisonment of up to 3 years or 1 million yen.
The warning from Japan comes shortly after the EU, the United States and the G7 announced new actions aimed at russia's economy and wealthy individuals in connection with efforts to evade cryptocurrency sanctions.
Singapore bans fundraising for Russia with cryptocurrencies
Other Asian countries, such as Singapore, have also agreed to sanctions against Russia. Over the past week, Singapore has banned all financial institutions from conducting transactions with sanctioned Russian banks, as well as donations to the Russian government and related entities. The sanctions cover transactions in cryptocurrencies, NFT and other digital assets.
Directors at cryptocurrency businesses such as the Luno exchange said that most cryptocurrency companies in Singapore often do not have direct relationships with individuals or entities in Russia. ADDX, an individual cryptocurrency exchange in Singapore, also said that the organization has not been affected by sanctions against Russia.
"We use customer identity verification (KYC) and anti-money laundering (AML) processes for all of our investors, and so we don't make any anonymous transactions," said Oi-Yee Choo, CEO of ADDX.
Major cryptocurrency exchanges in South Korea block Russian IP addresses
Earlier, South Korea also participated in global sanctions against Russia. Many cryptocurrency exchanges in the country have blocked IP addresses or Russian users.
According to a report by Yonhap news agency, until March 3, major exchanges in South Korea including Upbit had blocked withdrawals from Russian IP addresses. Other cryptocurrency exchanges such as Gopax, Bithumb and Korbit also restrict access to accounts on the platform from Russian IP addresses.
While many countries are moving toward restricting cryptocurrency trading because of the possibility of evading sanctions, governments in other countries have turned to cryptocurrencies as it is one of Russia's rare options for paying for international services in the wake of global sanctions.
Thailand proposes to allow Russia to pay in cryptocurrencies as other payment methods have been blocked
On March 8, Phuket Tourism Association President Bhummikitti Ruktaengam said that the organization is in talks with the Bank of Thailand about accepting cryptocurrencies as an alternative payment method for Russian tourists stranded in the country because of sanctions.
Previously, Russians were unable to use Mastercard, Visa debit cards and credit cards abroad because the payment giants decided to stop supporting Russians as part of the sanctions.
"Cryptocurrencies can act as a contingency plan when transactions are not processed," Bhummikitti said.
Must be very frustrating for Russians outside of Russia as they can’t use their cards issued by Russian banks that use Visa and Mastercard to pay. There’s a proposal in Thailand now to allow them to use crypto to pay for stuff. https://t.co/4MJsOxElI4
— Aysha Ridzuan (@ayshardzn) March 9, 2022
As leaders around the world have actively limited Russia's ability to evade cryptocurrency sanctions, many lawmakers in the country have also begun to think of cryptocurrencies as a potential tool to avoid restrictions.
On Sunday, Russian State Duma Representative Alexander Yakubovsky suggested that Russia should establish and use its cryptocurrency exchanges to soften the impact of global sanctions on Russia.
"Crypto is an area where restrictions are very effective against our country that are hard to touch," Yakubovsky said in an interview with parlamentskaya gazeta. As previously reported, Russian authorities deliberately restrict the services of legitimate cryptocurrency exchanges only to foreign companies such as Binance. The Bank of Russia has also deliberately restricted the provision of cryptocurrency investments by domestic financial companies.
