Cryptoasset sector told by UK regulators to comply with Russian sanctions

FILE PHOTO: City workers walk past the Bank of England in London
FILE PHOTO: City workers walk past the Bank of England in London February 13, 2008. Interest rates won't fall as sharply this year as financial markets have predicted, the Bank of England signalled on Wednesday, although at least one more cut in borrowing costs is probably still on the cards. REUTERS/Toby Melville

March 11, 2022

LONDON (Reuters) -Financial services firms including those in the cryptoasset sector were warned by Britain’s regulatory bodies on Friday that they were expected to ensure sanctions imposed against entities and individuals in Russia and Belarus were complied with.

“We are working closely with partners in government and law enforcement both here and abroad, including regulatory authorities, to share intelligence and act to prevent sanctions evasion, including through cryptoassets,” the financial regulators said.

“We also remain ready to act in the event of sanctions breaches,” added the statement from the Office of Financial Sanctions Implementation, the Financial Conduct Authority (FCA) and the Bank of England.

The statement said the use of cryptoassets to circumvent economic sanctions was a criminal offence, and that sanctions regulations did not differentiate between cryptoassets and other forms of assets.

The FCA had already written to all registered cryptoasset firms and those holding temporary registration status to highlight those entities and individuals who had been sanctioned, it added.

“Both the FCA and the Prudential Regulation Authority will act if they see authorised financial institutions supporting cryptoasset firms operating in the UK illegally,” the statement said.

A senior European Union official said last week that the European Commission is studying whether cryptoassets are being used to get round financial sanctions imposed on Russian banks.

(Reporting by Michael Holden; editing by Diane Craft and Sandra Maler)