New Rules For Crypto Exchanges To Stop Sanctions Fraudsters

The UK government has updated its guidelines on financial penalties to address what it believes to be a digital loophole in previous rules.

Under the new sanctions regime, cryptocurrency exchanges are required to notify the Treasury if a customer is on the officially designated list. Failure to do so will be considered a criminal offence.

According The Guardianconcerns are growing that Russian individuals and companies linked to Putin’s regime may attempt to evade sanctions by using digital currencies such as Bitcoin, Ether and Tether, or non-fungible tokens (NFTs).

The new guidelineswhich have been published by the Office of Treasury Financial Sanctions Enforcement, will mean that exchanges now have the same legal obligations as other businesses, including real estate companies, accountancy firms, law firms and jewelers, according to the report.

“It is vital to address the risk that crypto-assets are used to breach or circumvent financial sanctions,” a Treasury spokesperson reportedly said. “These new requirements will cover companies that record holdings or enable the transfer of crypto-assets and are therefore most likely to hold relevant information.”

Early in the Russian invasion of Ukraine, crypto exchange giants Coinbase and Binance claimed the cryptocurrency market is too small and traceable for oligarchs to use to circumvent sanctions.

Binance argued that only around 0.3% of global net worth is held in crypto and that any major sanctions evasion activity would be “prohibitively expensive and detectable, as this buying activity would likely lead to surges. of price”.

However, in April the company reportedly decided to block numerous accounts linked to relatives of Russian politicians, such as Olina Kovaleva, the daughter-in-law of Foreign Minister Sergei Lavrov, and Elizaveta Peskova, the daughter of Putin’s spokesman, Dmitry Peskov.

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