Crypto exchanges operating in the UK will now be concerned about any suspicious transactions and crypto assets that are connected to sanctioned Russian people or companies. 

The national regulations were updated on August 30 by the Office of Financial Sanctions Implementation (OFSI) imposing indistinctness on whether crypto assets fall under the existing set of rules. The official guidelines were changed to distinguish “crypto assets” as assets that should be frozen if sanctions are imposed on an individual or entity. 

A Treasury spokesperson said: “It is vital to address the risk of crypto assets being used to breach or circumvent financial sanctions. These new requirements will cover firms that either record holdings of, or enable the transfer of crypto assets and are therefore most likely to hold relevant information,” (via The Guardian). 

The Office of Financial Sanctions Implementation of Treasury’s established rules will make crypto exchanges criminally responsible if they fail to unveil clients targeted for sanctions. 

As per the rules, crypto trades must act rapidly if they suspect that one of their clients is dependent upon penalties, or if they suspect a breach of sanctions, placing them in a similar category as accountants, estate agents, jewelers, and attorneys. 

UK sanctions against Russia started in 2019 and started to ramp up in February 2022 because of the continuous attack on Ukraine. They incorporated a denied list of assets going from antiques and works of art to cheques and dividends. However, until last week, crypto assets were excluded.  

“This sanctions regime is aimed at encouraging Russia to cease actions destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine,” (via gov.uk).  

UK crypto exchanges will be expected to report any conceivable sanction breaks as they happen or risk criminal prosecution and a potential fine.