TOKYO: Japan has urged crypto exchanges not to process transactions involving crypto assets subject to asset-freeze sanctions against Russia and Belarus, officials said on Monday.

The government will work as one to strengthen measures against the transfer of funds using crypto assets that would be in violation of the sanctions, the Ministry of Finance and Financial Services Agency (FSA) said in a joint statement.

US Treasury stresses that Russia sanctions extend to cryptocurrency

Unauthorised payments to targets under sanctions, including in crypto assets - such as cryptocurrency and non-fungible tokens - are subject to punishment of up to three years in prison or a 1 million yen ($8,487.52) fine, the FSA said.

The move follows growing concerns among Group of Seven advanced economies that cryptocurrencies are being used by Russian entities as a loophole for financial sanctions imposed upon the country for invading Ukraine.