US diplomats target Japanese crypto companies in Russia

The United States has appealed to Japan to increase pressure on its cryptocurrency exchanges, which do business with Russia.

US diplomats have asked Japanese officials to target crypto operations in Irkutsk, Siberia, where cool temperatures and cheap, sustainable energy have attracted miners.

According to three exchanges, Japan’s Financial Services Agency (FSA) has ordered all exchanges under its jurisdiction to sever any remaining ties with Russia as the United States and its allies try to isolate the Kremlin from the global economy. Currently, 31 FSA-licensed exchanges operate in Russia.

In October last year, the US Office of Foreign Assets Control introduced sanctions legislation including cryptocurrencies in its scope, and the country BitRiver, Russia’s largest co-location provider for mining with three plants in the country, in hot water.

Japanese Prime Minister Fumio Kishida, visiting the United Kingdom two months ago, stressed the importance of an overall international response to Russia’s invasion of Ukraine.

He said it was important to show Russia the consequences of attacking its neighbor and to dissuade China from attacking the Taiwan Strait, an area that is key to international stability.

Asked about the renewed pressure on miners, a spokesman for the US State Department said they were determined to hold Russia accountable for its actions and indicated that they were ready to take more serious action.

The FSA is moving to bring digital assets under the sanctions rules

In March, the FSA moved to monitor the movement of assets belonging to any sanctioned entity under the new rules that bring digital assets into Japan’s foreign exchange and foreign trade law. The law now authorizes the Japanese government to monitor incoming and outgoing cash flows for violations of sanctions.

While the new regulations did not explicitly prohibit doing business on Russian territory, some stock exchanges interpreted it that way and closed the store in March.

However, some stock exchanges and mines have used new strategies to maintain business relations with their Russian entities. An exchange set up a shell company in Singapore to channel funds to its Russian interests.

Soviet power a magnet

The Irkutsk region of Siberia is littered with hydroelectric dams established during the Soviet era under Joseph Stalin’s rule. The plants were originally used to run uranium enrichment for nuclear weapons, but now miners who want to capitalize on $ 0.0012 per kilowatt-hour are running the house price.

China’s ban on miners triggered a sale of mining equipment that became available to miners in Russia. Mining hardware in Russia is usually purchased over Telegram from informal traders who import the equipment from China.

Last year, the governor of Irkutsk wrote to President Vladimir Putin’s deputy leader complaining about a flood of new demand on the region’s network.

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