Cryptocurrencies: Russia

(asked on 7th March 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to ensure robust regulatory mechanisms are in place for the sale and transfer of digital financial assets, including non-fungible tokens (NFTs), to prevent Russian organisations and individuals from evading sanctions relating to the war in Ukraine.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 10th March 2022

Financial sanctions regulations do not differentiate between cryptoassets and other forms of assets. Office of Financial Sanctions Implementation (OFSI) guidance states that crypto assets are an economic resource and are caught by financial sanctions restrictions

All persons in the UK are subject to the Sanctions and Anti-Money Laundering Act 2018, and the circumvention of sanctions is a criminal offence. The financial sanctions regime is enforced by OFSI, working in cooperation with the National Crime Agency.

Cryptoasset exchange providers, custodian wallet providers, electronic money institutions and payment service providers are in scope of the UK’s Money Laundering Regulations. These businesses must be registered with the Financial Conduct Authority for anti-money laundering supervision, and are expected to apply risk-sensitive customer due diligence measures in order to identify and verify the customer and understand the purpose behind their transactions. This includes checking that the customer is not subject to sanctions and does not intend to use the services for criminal purposes, including assisting others in the evasion of sanctions.

In addition, the government will shortly publish a response to its recent consultation on creating a requirement for entities to collect, verify, transmit, and retain specified information about the beneficiary and originator of a transfer of cryptoassets, to assist in the prevention and detection of illicit financial transfers.

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