Here’s how Asian countries deal with crypto sanctions against Russia

Global regulators continue asking crypto exchanges to comply with sanctions against Russia as the country itself has no legal crypto trading platforms.

Amid the United States and the European Union taking measures to prevent Russia from using cryptocurrencies to potentially evade sanctions, some countries in Asia have also been moving to respond to the situation.

Japan to fine crypto exchanges for violating sanctions

Japan became the latest country in Asia to call cryptocurrency firms to comply with sanctions against Russia, requesting on Monday that they  not process crypto transactions involving sanctioned individuals or entities in Russia and Belarus.

The Japanese Financial Services Agency (FSA) and the Ministry of Finance issued a joint statement on sanctions against Russia, stressing that crypto is part of the restrictions and any crypto assets identified to be related to sanctions should be frozen.

The FSA reportedly said that any unauthorized transactions under sanctions, including transfers of cryptocurrencies or nonfungible tokens (NFT), are subject to major penalties like imprisonment of up to three years or a 1 million yen ($8,500) fine.

The latest sanction alert from the Japanese government came shortly after the European Union, the United States and the G7 nations announced new actions targeting Russia’s economy and wealthy individuals linked to potential attempts to circumvent sanctions using crypto.

Singapore bans fundraising in crypto for Russia

Other Asian countries like Singapore have also been moving to comply with sanctions against Russia. Singapore over the last week reportedly banned all local financial institutions from conducting transactions with sanctioned Russian banks as well as facilitating fundraising for the Russian government and related entities, with sanctions covering cryptocurrency transactions, nonfungible tokens and other digital assets.

Executives at some crypto businesses like the crypto exchange Luno, reportedly suggested that most crypto businesses in Singapore were unlikely to have direct business relationships with Russia-based individuals or entities. ADDX, a crypto-enabled private market exchange in Singapore, also said that the fund has not been impacted by sanctions on Russia.

“We perform Know Your Customer and Anti-Money Laundering checks on all our investors, and we, therefore, do not handle any anonymous transactions,” ADDX CEO Oi-Yee Choo said.

Major crypto exchanges in South Korea block Russian IP addresses

Previously, South Korea had also joined global sanctions against Russia, with several local cryptocurrency exchanges blocking IP addresses or Russian users.

According to a report by local news agency Yonhap, major South Korean exchanges including Upbit blocked withdrawals from Russia-linked IP addresses as of March 3. Other local crypto exchanges like Gopax, Bithumb and Korbit also restricted access to platform accounts from Russian IP addresses.

While some countries are moving to restrict crypto transactions due to links with apotential evasion of sanctions, other governments reportedly turn to cryptocurrencies as they appear to be one of few options for Russians to pay for services abroad amid massive global sanctions.

Thai association proposes to allow Russians to pay in crypto as other payment methods are blocked

On March 8, Phuket Tourist Association President Bhummikitti Ruktaengam reportedly said that the group was in talks with the Bank of Thailand about potentially adopting cryptocurrency as an alternative payment option for Russian tourists who had gotten stuck in the country due to the sanctions.

Previously, Russians were unable to use their Mastercard and Visa debit and credit cards abroad because the payment giants decided to cut support to all Russians as part of the sanctions.

“Cryptocurrencies would serve as a backup while transactions could not proceed,” Bhummikitti noted.

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

— (@ayshardzn) March 9, 2022

As regulators around the world have been actively moving to limit Russia’s chances to potentially evade sanctions with crypto, some local lawmakers also started to think of crypto as a tool to potentially avoid some of the restrictions.

Related: Bitfinex refuses to freeze crypto belonging to non-sanctioned Russians

On Sunday, Russian State Duma deputy Alexander Yakubovsky suggested that Russia should establish and use its own crypto exchanges in a move to soften the impact of global sanctions on Russia.

“Crypto is an area where it’s hard to talk about really effective restrictions against our country,” Yakubovsky stated in an interview with the local news agency Parlamentskaya Gazeta. As previously reported, Russian authorities were intentionally limiting the service of legal crypto exchanges only to foreign companies like Binance, with the Bank of Russia deliberately limiting local financial firms from offering crypto investment.