The Japanese government asked domestic cryptocurrency exchanges on Monday to halt transactions with Russian and Belarusian organizations and individuals sanctioned following Moscow's invasion of Ukraine.
The request came after seven Russian banks were excluded Saturday from a key international payment network known as SWIFT. Since cryptocurrencies are not transferred via banks and restrictions vary in countries and exchanges, concerns have been growing that such currencies may be a loophole to sidestep some sanctions.
The request also came after Group of Seven leaders recently affirmed that Russia could not use such assets to elude sanctions, and it builds on Japan's current asset freezes of Russian and Belarusian individuals and organizations.
Cryptocurrencies are already subject to Japan's sanctions imposed on Russia to disrupt its trade and money transfers. Despite the request, it is difficult to monitor transfers conducted directly between cryptocurrency users.
The government's call to 30 cryptocurrency exchanges not to transfer assets targets 44 Russian individuals, including President Vladimir Putin, and 10 groups.
For Belarus, which has been aiding Moscow's aggression, 19 individuals, including President Alexander Lukashenko, and 15 organizations are subject to sanctions.
The government also asked the exchanges to step up their monitoring of crypto assets and report to financial authorities any suspicious transactions that may involve those who are subject to the sanctions.
In a statement issued on Friday, the G-7 leaders said, "We will ensure that the Russian state and elites, proxies and oligarchs cannot leverage digital assets as a means of evading or offsetting the impact of international sanctions."
The leaders of Britain, Canada, France, Germany, Italy, Japan and the United States, plus the European Union, said they "will impose costs on illicit Russian actors using digital assets to enhance and transfer their wealth, consistent with our national processes."
The Japanese Finance Ministry made clear in October 2020 that the law related to freezing assets covers cryptocurrencies.