Thursday 03 March 2022 12:43 pm

UK regulators pressure crypto firms to enforce Russian sanctions

Crypto firms are under pressure from UK regulators to ensure that economic sanctions against Russia are enforced.

The Financial Conduct Authority (FCA) has written to regulated crypto firms spelling out their responsibilities when it comes to enforcing sanctions against Russia over the invasion of Ukraine. Meanwhile, the Treasury has revealed it is working across government departments and engaging with multinational partners to look into ways of crackdown down on the use of digital assets to circumvent sanctions.

“Our financial sanctions cover funds and economic resources of every type, including crypto assets,” a spokesperson for the Treasury told City A.M.

“Those who seek to circumvent our sanctions will face enforcement action,” the spokesperson continued, stressing that circumvention of sanctions is a criminal offence regardless of the assets used.

While digital assets themselves are not regulated in the UK crypto firms are subject to the FCA’s anti-money laundering regime which makes sure firms do not trade with sanctioned entities.

“As you would expect, we have reached out to each crypto firm registered with us to ensure that they are aware of sanctions and their responsibilities,” the FCA told City A.M..

” We are working with partners to actively monitor these firms. We have made it clear to crypto firms, banks and others that we expect them to focus on their sanction controls and, with our partners, we will be supervising their actions,” the spokesperson added.

Crypto firms have come under intense scrutiny from lawmakers and regulators amid the conflict between Russia and Ukraine. On Sunday, Ukraine’s vice prime minister called on crypto exchanges to freeze the accounts of Russian and Belarusian clients.

While the world’s largest crypto exchanges including Binance, Coinbase and Kraken are supporting sanctions against certain Russian individuals they have resisted the call to issue a blanket ban.

Yesterday, Binance’s chief executive Changpeng Zhao said that a distinction should be drawn between the perpetrators of the war and innocent civilians. “From an ethical point of view many Russians do not support this war so I think we should separate the politicians to the normal people,” he said.