Japan is reportedly going to make changes to its Foreign Exchange and Foreign Trade Act, to have crypto exchanges subjected to the legal scope currently  governing banks. 

Specifically, as revealed by a representative of the authority on March 28th, the amendment in discussion is reportedly working towards an objective of stopping sanctioned nations from taking crypto-enabled evasive actions.

Chief Cabinet Secretary Hirokazu Matsuno additionally revealed that the authority is having plans to release a revision bill to have crypto included within its scope. 

Fumio Kishida, the freshly elected prime minister of Japan, further threw his weight behind the proposed revision, as well as calling for coordinated actions with Western allies to enforce the new laws.

Under the revised foreign exchange laws, it will reportedly be mandatory for crypto exchanges, the same as banks, to complete the verification and flag transactions connected to sanctioned Russian individuals or groups.

Japan – together with the majority of its allies in the West – has reportedly carried out financial sanctions against Russia following the assault launched into Ukraine. 

In early March this year, the Japanese financial regulatory agency also asked crypto exchanges to adopt a hesitant attitude upon supporting transactions for sanctioned targets.

Nonetheless, a parliamentary amendment to the law would make it a legal compulsion for crypto exchanges to block transactions for various sanctioned Russian officials, oligarchs, banks and other institutions.

The driving force that led to worries related to Russia potentially trying to evade sanctions with cryptocurrency arises from the country’s growing interest in the crypto market and recent comments made by its ministers.