Under the new guidelines imposed in the UK over concerns that bitcoin, as well as other crypto assets, are being utilized to evade sanctions established in response to Russia and Ukraine war, cryptocurrency exchanges are reportedly required to notify potential sanctions breaches to British authorities.

Official guidelines were updated on August 30^th to expressly list “cryptoassets” as items that must be banned if sanctions are levied on a company or person. In addition to digital assets like ether and tether, bitcoin, and other potentially valuable digital currencies, crypto assets can also comprise NFTs or non-fungible tokens.

According to the regulations established by the Treasury's Office of Financial Sanctions Implementation, cryptocurrency exchanges will be breaking the law if they fail to report customers who are subject to sanctions.

Under the regulations, cryptocurrency exchanges have the same obligations as professionals like accountants, estate agents, lawyers, and jewelers to take suitable measures if they speculate one of their users is subject to sanctions or if they suspect a breach of sanctions.

Financial sanctions against individuals and firms associated with Vladimir Putin's administration have been among Britain's most noticeable reactions to the conflict between Russia and Ukraine.

Binance, the largest crypto exchange in the world by trading volume, announced in April that it has suspended the accounts of Russian politicians' relatives, notably Polina Kovaleva, the Foreign Minister's stepdaughter, Sergei Lavrov, as well as Elizaveta Peskova, the daughter of Putin's spokesman, Dmitry Peskov. The exchange has allayed concerns that cryptocurrency may be used to evade sanctions.

The UK already has regulations that cover all economic resources against using cryptocurrency to evade sanctions and transfer money offshore. The modification highlights the authorities' concern regarding the comparatively new assets, which may be helpful for avoiding sanctions since users do not count on regulated firms to conduct transactions.

The White House as well as the US Treasury requested cryptocurrency exchanges to cease operations in Russia in February. Crypto assets are subject to sanctions regulations, according to a joint statement from UK financial regulators published in March. The EU forbade significant cryptocurrency transactions with Russia in April.

Source credit: https://www.theguardian.com/technology/2022/sep/04/crypto-exchanges-suspected-sanction-breaches-russia