U.S. diplomats have reportedly called on authorities in Tokyo to increase pressure on Japanese crypto exchanges and miners to sever links to Russia. The request was made to deepen Moscow’s financial isolation amid the ongoing Russian assault on Ukraine.
Washington Wants Japan’s Crypto Companies to Cut Ties, Further Isolate Russia
The United States has urged Japan to put more pressure on cryptocurrency exchanges and mining companies that continue to work with Russians. The U.S. wants the Japanese entities to end their business relations with Russia, thus adding to its financial isolation from the rest of the world.
The request, made by American diplomats, is targeting several of Japan’s more than 30 licensed crypto trading platforms that are still present in the Russian Federation, the Financial Times revealed in an article on Friday, quoting people familiar with the matter.
The U.S. representatives told Tokyo to focus on halting crypto mining operations with Japanese participation in the Siberian Irkutsk Oblast, two knowledgeable sources said. The region is known as Russia’s mining capital as it offers cheap hydroelectric power and a cool climate.
Other unidentified individuals, close to three exchanges, told the business daily that Japan’s Financial Services Agency (FSA) responded by renewing demands for the coin trading platforms to cut any remaining relationships with Russia.
The FSA has declined to comment for the publication. In mid-March, the regulatory body asked the exchanges it oversees to monitor any accounts and transactions involving the transfer of assets of any person or entity placed under sanctions.
Although the agency did not explicitly instruct the companies to close any Russia-related operations, some have already stopped working there. For example, crypto exchange Decurret said that it decided to suspend its activities in Russia after the FSA’s notice.
A former executive of another exchange has confirmed that Japanese exchanges are facing intensified pressure to move any mining or back-office operations out of Russia. However, one person who chose to remain anonymous, also told the newspaper they knew of at least one exchange that maintained its Russian business by establishing a shell company in Singapore to reroute all payments.
The U.S. request comes after the introduction of changes to Japan’s Foreign Exchange and Foreign Trade Act introduced to cover cryptocurrencies and other digital assets. The amendments aim to strengthen Tokyo’s powers to restrict digital currency flows in and out of the country.
Do you think the authorities in Tokyo will be able to convince Japanese crypto exchanges to cut business ties with Russia? Tell us in the comments section below.
July 9, 2022
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