Under new guidelines adopted in response to concerns that bitcoin and other crypto-assets are being used to circumvent sanctions imposed in response to Russia’s invasion of Ukraine, cryptocurrency exchanges will have to report sanctions violations to UK authorities.
On August 30, official guidelines were changed to identify “crypto-assets” as assets that should be frozen if sanctions are imposed on any person or entity. Crypto-assets, in addition to digital currencies such as Bitcoin, Ether, and Tether, may consist of other hypothetically valuable digital assets such as fungible tokens.
Rules set by the Treasury’s Office of Financial Sanctions Enforcement make crypto exchanges criminally liable for failing to disclose sanctioned clients.
According to the guidelines, crypto exchanges must act quickly if they suspect one of their clients is subject to sanctions or put them in the same category as real estate agents, accountants, lawyers and jewelers if they suspect them of violating sanctions.
Financial sanctions against individuals and businesses associated with Vladimir Putin’s regime have been one of the UK’s most visible responses to the invasion of Ukraine.
Sanctions have been imposed against oligarchs and families with direct stakes in crypto-assets. Among them is Vladimir Potanin, Russia’s former second-richest person, who backed Swiss blockchain company Atomyze.
Kutcherev, son of oligarch Mikhail, held a stake in the Belarus-based cryptocurrency exchange until August 2021, the same day Botan was admitted in June. Oleg Deripaska, a metals tycoon, once encouraged the Russian central bank to allow Bitcoin to be used as a payment method. There is no evidence that they used crypto-assets to avoid fines.
Finans, the world’s largest cryptocurrency exchange by trading volume, announced in April that it had frozen the accounts of relatives of Russian politicians, including Polina Kovaleva, daughter-in-law of Foreign Minister Sergey Lavrov, and Elizaveta Peskova, Putin’s daughter. Spokesman, Dmitry Peskov. . The exchange has already played down concerns about using cryptocurrency to circumvent sanctions.
Using cryptocurrency to avoid sanctions and transfer money around the world is already banned in the UK under regulations that apply to all “economic resources”. However, this adjustment highlights the concerns of the authorities regarding the relatively new ones.
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