Crypto exchanges operating in the UK will now flag up any suspicious transactions involving crypto assets that are linked to sanctioned Russian individuals or entities.
The national regulations were updated last week by the Office of Financial Sanctions Implementation (OFSI) following a gray area on whether crypto assets fall under existing frameworks.
A Treasury spokesperson said: “It is vital to address the risk of crypto assets being used to breach or circumvent financial sanctions. These new requirements will cover firms that either record holdings of, or enable the transfer of crypto assets and are therefore most likely to hold relevant information,” (via The Guardian).
UK sanctions against Russia began in 2019 and started to ramp up in February this year due to the ongoing invasion of Ukraine. They included a deny list of assets ranging from antiques and works of art to cheques and dividends. However until last week, crypto assets weren’t included.
“This sanctions regime is aimed at encouraging Russia to cease actions destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine,” (via gov.uk).
UK exchanges will be required to report any possible sanction breaches as they happen or risk criminal prosecution and a potential fine.
Global crypto sanctions against Russia
The US has also imposed sanctions against crypto miners in Russia and urged Japanese regulators to cut ties with crypto firms. In addition, the EU noted that crypto assets now come under the scope of “transferable securities” which are being restricted against Russia as part of their sanction package.
UK sanctions against Russia reflect the late prime minister Boris Johnson and his support of Ukraine. This is despite the country’s shaded history with the Russian state, from undisclosed meetings with KGB officers to allegations of swaying the Brexit vote.