UK Orders Crypto Exchanges To Report Violations Of Sanctions

The Office of Financial Sanctions Implementation (OFSI) of the UK Treasury has modified its sanctions guidance to cover cryptocurrency exchanges.

Following Russia’s invasion of Ukraine this year, financial sanctions have drawn more attention, leading some nations, like the UK, to impose limits on contacts with Russian firms. They can range from targeted asset freezes to restrictions on financial services, and they are implemented to fulfill foreign policy or national security purposes.

While banks and financial services firms have been facing strict Russian sanctions requirements for months, cryptocurrency exchanges must now also comply, according to updated documents from the OFSI. The Guardian first reported the change in OFSI’s guidance, which was implemented on August 30. 

Exchanges must report any suspected breach to the OFSI and freeze funds or face criminal charges or financial penalties, according to the updated document. Custodian wallet providers are also subject to reporting obligations, as per the sanctions guidelines. 

UK FCA stated that crypto exchanges must do their part to ensure that sanctions are followed

Additionally, the agency offered instructions on how to comply.

Due to UK regulations that apply to all “economic resources,” utilizing bitcoins to escape punishment was already prohibited. Instead, the entities that permit transactions are the subject of this modification.

“These new requirements will cover firms that either record holdings of or enable the transfer of cryptoassets and are therefore most likely to hold relevant information” a UK Treasury spokesperson told The Guardian.

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